Materials worked example

Material Price Variance with standard price of 1.2 $ / unit: a worked example

Suppose standard price falls to 1.2 $ / unit. This page works the full calculation at that level so you can see exactly which result moves and by how much. Measure actual-versus-standard material price variance for purchased or consumed materials.

The inputs for this scenario

  • Standard price: 1.2 $ / unit (the input this scenario stresses; the baseline uses 2.4)
  • Actual price: 2.68 $ / unit (held at the documented default)
  • Quantity: 18,000 units (held at the documented default)
  • Annual usage: 96,000 units / yr (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Price variance = (actual price − standard price) × quantity.
  • Price variance works out to 26,640 $ at these inputs, and this is the headline figure for the scenario.
  • Variance per unit works out to 1.48 $ / unit at these inputs.
  • Annualized impact works out to 142,080 $ / yr at these inputs.
  • Actual material cost works out to 48,240 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where standard price sits at 2.4 $ / unit and the headline result is 5,040 $, this scenario comes in 429% above the baseline at 26,640 $.
  • It computes the price variance for a purchased material as (actual price minus standard price) times the quantity bought, plus the per-unit gap and its annualized cost impact. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Price variance: 26,640 $ (headline result)
  • Variance per unit: 1.48 $ / unit
  • Annualized impact: 142,080 $ / yr
  • Actual material cost: 48,240 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Material Price Variance calculator, set standard price to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.