Editing Direct material total variance

{{Unreferenced|date=December 2009}}
In [[variance analysis (accounting)]] '''direct material total variance''' is the difference between the [[actual cost]] of [[actual number]] of units produced  and its budgeted cost in terms of material.  Direct material total variance can be divided into two components:
*the [[direct material price variance]],
*the [[direct material usage variance]].

==Example==
Let us assume that standard direct material cost of [[Widget (economics)|widget]] is as follows:
:2 kg of [[unobtainium]] at $ 60 per kg ( = $ 120 per unit). 
Let us assume further that during the given period, 100 widgets were manufactured, using 212&nbsp;kg of [[unobtainium]] which cost $ 13,144.

Under those assumptions direct material total variance can be calculated as:
{{Infobox VarianceAnalysis VarianceBox|tx1=100 units should have cost (× $ 120 per unit)
|tx2=but did cost
|tx3=Direct material total variance
|am1=12,000
|am2=13,144
|am3=1,144
|va1=A
}}
Direct material total variance can be reconciled to [[direct material price variance]] and [[direct material usage variance]] by:
{{Infobox VarianceAnalysis VarianceBoxRec|tx1=Direct material usage variance
|tx2=Direct material price variance
|tx3=Direct material total variance
|am1=720
|am2=424
|am3=1,144
|va1=A
|va2=A
|va3=A
}}
See [[direct material usage variance#Example]] and [[direct material price variance#Example]] for computations of both components.

==See also==
*[[Variance analysis (accounting)]]
*[[Direct material price variance]]
*[[Direct material usage variance]]

==References==
{{reflist}}

{{DEFAULTSORT:Direct Material Total Variance}}
[[Category:Management accounting]]