Circular Economy, Recycling & Remanufacturing worked example

Recycled Material Price Variance at 53% share of volume exposed to the variance: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop share of volume exposed to the variance to 53%, then walk the calculation through step by step. Estimate the financial impact of recycled material price changes across purchased or recovered material volume.

The inputs for this scenario

  • Recycled material purchased or consumed: 36,000 kg (held at the documented default)
  • Price variance per kg versus baseline: 0.18 $ / kg (held at the documented default)
  • Share of volume exposed to the variance: 53 % (the input this scenario stresses; the baseline uses 74)
  • Fixed qualification, expedite, or supplier-change cost: 900 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable recycled material variance = recycled material purchased or consumed × price variance versus baseline × material volume exposed to the variance.
  • Total recycled material price variance works out to 4,334 total recycled material price variance at these inputs, and this is the headline figure for the scenario.
  • Variance per kg purchased works out to 0.12 $ / piece at these inputs.
  • Variable recycled material variance works out to 3,434 $ at these inputs.
  • Fixed qualification, expedite, or supplier-change cost works out to 900 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where share of volume exposed to the variance sits at 74% and the headline result is 5,695 total recycled material price variance, this scenario comes in 23.89% below the baseline at 4,334 total recycled material price variance.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to share of volume exposed to the variance, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It models one variance rate against a single baseline; if you bought at several different prices through the period, run each tranche separately or use a weighted-average baseline.

Results at a glance

  • Total recycled material price variance: 4,334 total recycled material price variance (headline result)
  • Variance per kg purchased: 0.12 $ / piece
  • Variable recycled material variance: 3,434 $
  • Fixed qualification, expedite, or supplier-change cost: 900 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Recycled Material Price Variance calculator, set share of volume exposed to the variance to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.