Direct Material Price Variance Calculator

Q: How do I get standard price?

Standard price is your expected or budgeted cost per unit, often from historical data or contracts. Use it as the benchmark for the period.

Calculate direct material price variance: (Actual price − Standard price) × Actual quantity. Favourable vs unfavourable.

Use the Direct Material Price Variance Calculator

Enter actual quantity, actual price per unit, and standard price per unit. Variance and favourable/unfavourable are shown.

Material inputs

Actual quantity and prices vs standard price.

Actual quantity (AQ)

Actual price per unit (AP) $

Standard price per unit (SP) $

Results

Price variance

$200

Favourable / Unfavourable

Unfavourable

Direct material price variance = (AP − SP) × AQ. Negative = favourable (paid less than standard); positive = unfavourable.

AP = 5.2, SP = 5, AQ = 1000

What this metric means

Direct material price variance isolates the effect of paying more or less than standard per unit. It’s used in variance analysis for cost control.

How to interpret

Favourable variance means you paid less than planned; investigate whether standards need updating or purchasing did well. Unfavourable means pay more attention to sourcing and prices.

FAQs

What is price variance?▾

Price variance measures the cost impact of paying a different price per unit than standard. Formula: (AP − SP) × AQ. Negative = favourable (paid less).

When is it favourable?▾

When you pay less than standard (AP < SP), the variance is negative, which is favourable. When you pay more, it’s unfavourable.

How do I get standard price?▾

Standard price is your expected or budgeted cost per unit, often from historical data or contracts. Use it as the benchmark for the period.

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Use the Direct Material Price Variance Calculator

Enter actual quantity, actual price per unit, and standard price per unit. Variance and favourable/unfavourable are shown.

Material inputs

Actual quantity and prices vs standard price.

Actual quantity (AQ)

Actual price per unit (AP) $

Standard price per unit (SP) $

Results

Price variance

$200

Favourable / Unfavourable

Unfavourable

Direct material price variance = (AP − SP) × AQ. Negative = favourable (paid less than standard); positive = unfavourable.

AP = 5.2, SP = 5, AQ = 1000

FAQs

What is price variance?▾

Price variance measures the cost impact of paying a different price per unit than standard. Formula: (AP − SP) × AQ. Negative = favourable (paid less).

When is it favourable?▾

When you pay less than standard (AP < SP), the variance is negative, which is favourable. When you pay more, it’s unfavourable.

How do I get standard price?▾

Standard price is your expected or budgeted cost per unit, often from historical data or contracts. Use it as the benchmark for the period.