Materials mix variance, Cost Accounting

Materials mix variance:  It can be described as that portion of direct material usage variance which is the variation between the actual quantities of ingredients used in a mixture at standard price and the entire quantity of ingredients used at the weighted average price for each unit of ingredients as displayed by the standard cost sheet.

MMV = Standard Price (Standard Quantity - Actual Quantity)

(or) when standard is revised because of the shortage of a particular type of material

MMV = Standard Price (Revised Standard Quantity - Actual Quantity)

Where Revised standard quantity = Total weight of actual mix x Standard quantity

                                               Total weight of standard mix

Posted Date: 10/15/2012 7:26:08 AM | Location : United States







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