Material Price Variance Calculator

Formula

The formula to calculate the Material Price Variance is:

\[ \text{MPV} = \text{SP} - \text{AMC} \]

Where:

$ \text{MPV} $ is the Material Price Variance ($).
$ \text{SP} $ is the standard price ($).
$ \text{AMC} $ is the actual material cost ($).

Example

Let's say the standard price is $50 and the actual material cost is $45. The material price variance would be calculated as follows:

\[ \text{MPV} = 50 - 45 = 5 \text{ dollars} \]

So, the material price variance is $5.

What is Material Price Variance?

Material Price Variance (MPV) is the difference between the standard price and the actual material cost. It is used to measure the cost efficiency of purchasing materials. A positive MPV indicates that the actual cost is less than the standard cost, which is favorable. Conversely, a negative MPV indicates that the actual cost is higher than the standard cost, which is unfavorable.