Material Usage Variance (MUV):

This is the variation between the actual quantity of material consumed and standard quantity which should have been consumed, expressed in terms of the standard price of the material.

MUV = Standard price (Standard quantity for actual production - Actual quantity used)

Reasons for usage variance may be

• Carelessness in the use of material
• Defective material
• Wastages caused by bad methods or bad workmanship
• Non-standard mix of materials used
• vary in the quality of materials used