Direct material total variance

In variance analysis (accounting) direct material total variance ^[1] is the difference between the actual cost of actual number of units produced and its budgeted cost in terms of material. Direct material total variance can be divided into two components:

• the direct material price variance,
• the direct material usage variance.

Example

Let us assume that standard direct material cost of widget is as follows:

2 kg of unobtainium at $ 60 per kg ( = $ 120 per unit).

Let us assume further that during the given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost $ 13,144.

Under those assumptions direct material total variance can be calculated as:

100 units should have cost (× $ 120 per unit)		€ 12,000
but did cost		€ 13,144
Direct material total variance		€ 1,144	(A)

Direct material total variance can be reconciled to direct material price variance and direct material usage variance by:

Direct material usage variance		€ 720	(A)
Direct material price variance		€ 424	(A)
Direct material total variance		€ 1,144	(A)

See direct material usage variance#Example and direct material price variance#Example for computations of both components.

See also

• Variance analysis (accounting)
• Direct material price variance
• Direct material usage variance

References

1. Bragg, Steven (15 June 2025). "Direct material price variance definition". accountingtools.com. Retrieved 1 October 2025.