Compute MPV (direct material price variance), MQV (material quantity variance), and total direct material variance with automatic favorable / unfavorable classification.
Verified example: ($5.20 − $5.00) × 1,000 = $200 unfavorable.
Verified example: (1,000 − 950) × $5.00 = $250 unfavorable.
Verified example: MPV $200 + MQV $250 = $450 unfavorable; cross-check: actual cost $5,200 − standard cost $4,750 = $450 unfavorable.
Scope: this calculator computes direct material variances (MPV and MQV) and their total. It does not compute labor variance (direct labor wage variance), overhead variance, or sales variance.
The following table is descriptive, for learning purposes:
| MPV | MQV | Descriptive meaning |
|---|---|---|
| Unfavorable | Unfavorable | Actual price above standard and usage above standard. |
| Unfavorable | Favorable | Actual price above standard, but usage more efficient than standard. |
| Favorable | Unfavorable | Actual price below standard, but usage above standard. |
| Favorable | Favorable | Actual price below standard and usage more efficient than standard. |
The following answers are for education and cost-accounting concept learning only.
MPV is the difference between the actual and standard price of direct materials, multiplied by the actual quantity purchased. The formula is MPV = (actual price − standard price) × actual quantity. Positive results are classified unfavorable and negative results favorable. Example: ($5.20 − $5.00) × 1,000 = $200 unfavorable.
MPV measures the price difference (actual vs standard price times actual quantity), while MQV, or material quantity variance, measures the usage difference (actual vs standard quantity times standard price). In cost accounting, MPV is generally associated with purchasing activity and MQV with usage efficiency in production.
Direct material variances (MPV and MQV) relate to material price and usage. Labor variance relates to direct labor wages and hours. This calculator only computes direct material variances and does not compute labor variance.
Because MPV is meant to isolate the effect of price changes from the effect of usage-quantity changes. By using actual quantity, the full price difference shows in MPV, while the usage difference shows in MQV.
Not always. A favorable variance means actual cost is lower than standard, but the causes behind it can vary. For example, favorable MPV can occur together with unfavorable MQV if cheaper materials produce more production waste. Variance numbers describe the difference, not a performance judgment.
Total direct material variance is the sum of MPV and MQV, which equals actual cost minus standard cost: (actual price × actual quantity) − (standard price × standard quantity). Example: $200 + $250 = $450, the same as $5,200 − $4,750 = $450 unfavorable.
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