Editing Direct material usage variance

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In [[variance analysis (accounting)|variance analysis]], '''direct material usage (efficiency, quantity) variance''' is the difference between the standard quantity of materials that should have been used for the number of units actually produced, and the actual quantity of materials used, valued at the [[standard cost]] per unit of material. It is one of the two components (the other is [[direct material price variance]]) of [[direct material total variance]].<ref>{{Cite book |last=Sasmita |first=Mishra |url=https://www.google.com/books/edition/Engineering_Economics_and_Costing/lSpO2qqRXYAC?hl=en&gbpv=0 |title=Engineering Economics and Costing |date=2011-08-30 |publisher=PHI Learning Pvt. Ltd. |isbn=978-81-203-4167-8 |edition=Revised |location=India |pages=251–252 |language=en}}</ref>

==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 given period, 100 widgets were manufactured, using 212&nbsp;kg of [[unobtainium]] which cost €13,144.

Under those assumptions direct material usage variance can be calculated as:
{{Infobox VarianceAnalysis VarianceBox2|unt=kg
|tx1=100 units should have used (× 2 kg)
|tx2=but did use
|tx3=Usage variance in kg
|tx4=standard cost per kg
|tx5=Usage variance in €
|am1=200
|am2=212
|am3=12
|am4=60
|am5=720
|va1=A
|va2=A
}}
Direct material usage variance can be reconciled to [[direct material total variance]] by way of [[direct material price variance]]:
{{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 total variance#Example]] and [[direct material price variance#Example]] for computations of both components.

==See also==
*[[Variance analysis (accounting)]]

==References==
{{reflist}}

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