Material Usage Variance
➦ Material Usage variance (MUV) is the difference between the standard quantity in production and the actual quantity consumed in production.
➦ During the production process, if the raw materials used in the production differ from the standard quantities that have been used to produce the output then this will result in MUV.
➦ MUV is the deviation of the ratio of the actual quantity of materials consumed for the actual output from the standard quantity of materials to be consumed for the actual output.
➦ The deviation of this quantity is to be multiplied by the standard price to convert the quantity into monetary value.
➦ MUV is favorable when the actual quantity of direct materials used is less than the total standard quantity allowed for the actual output.
➦ The concept of material usage variance refers to the difference between the actual usage of materials in the production process versus the standard usage based on the amount of output produced.
➦ The difference between the actual and expected material quantities used in a process is measured as an actual quantity.
➦ As a result of the production plan and the expected efficiency of the production process, the standard quantity of material is determined.