Material usage variance (muv), Cost Accounting

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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

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