Course Outline
Join PRO

What is the materials usage variance?

Harold Averkamp, CPA, MBA

Definition of Materials Usage Variance

The materials usage variance or materials quantity variance is associated with a standard costing system. This variance results when the actual quantity of materials used is different from the quantity of materials that should have been used to make the good output. In other words, the actual quantity of materials used to make the good output was different from the standard quantity of materials that should have been used.

The materials usage variance is unfavorable when the actual quantity of materials used exceeded the standard quantity of materials. The materials usage variance is favorable when the actual quantity of materials used was less than the standard quantity. In the U.S. the materials usage cost variance is expressed in dollars, which is the favorable or unfavorable quantity (such as pounds) times the standard cost per pound (or some other unit of measure such as gallons, liters, etc.)

Variances direct management’s attention to areas where the company’s operations are deviating from the company’s budgets and profit plans.

Example of Materials Usage Variance

Assume that a company’s standard costing system specifies that the standard quantity of direct materials to manufacturer one unit of output is 5 pounds. The system also specifies that the standard cost per pound of the material is $3 per pound.

If the company produced 100 units of good output, the company should have used 500 pounds of materials (100 units of good output X 5 pounds of materials per unit of output). If the company actually used 530 pounds of materials, the materials usage variance will be $90 unfavorable (30 additional pounds of materials X the standard cost per pound of $3). The $90 unfavorable materials usage variance can be explained by the following: $1,590 (530 actual pounds used X $3 standard cost) vs. the standard of $1,500 (100 units of output X 5 standard pounds = 500 standard pounds x $3 standard cost).

Join PRO to Track Progress
Must-Watch Video

Advance Your Accounting and Bookkeeping Career

  • Perform better at your job
  • Get hired for a new position
  • Understand your small business
  • Pass your accounting class
Watch the Video

Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials

Read all 2,645 reviews



PRO Plus

Lifetime Access (One-Time Fee)
Word Scrambles
Bookkeeping Video Training
Financial Statements Video Training
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Business Forms
All PDF Files
Progress Tracking
Earn Badges and Points
Certificate - Debits and Credits
Certificate - Adjusting Entries
Certificate - Financial Statements
Certificate - Balance Sheet
Certificate - Income Statement
Certificate - Cash Flow Statement
Certificate - Working Capital
Certificate - Financial Ratios
Certificate - Bank Reconciliation
Certificate - Payroll Accounting

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on

Learn More About Harold

Certificates of

Certificates of Achievement

We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping:

  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
Badges and Points
  • Work towards and earn 30 badges
  • Earn points as you work towards completing our course
View PRO Plus Features
Course Outline
Take the Tour Join Pro Upgrade to Pro Plus