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Typical Causes of Material Variances
Price Variances
a) Paying lower or higher prices than planned.
b) Losing or gaining quantity discounts via buying in larger or smaller quantities than planned.
c) Buying higher or lower quality than planned.
d) Buying substitute material because of unavailability of planned material.
Usage (Efficiency) Variances
a) Lower or Greater field from material than planned.
b) Gains or losses because of use of substitute or lower/gather quality than planned.
c) Efficiency or inefficient machinery.
d) Lower or Grater rate of scrap than anticipated.
e) Poorly trained workers or extremely high quality labour.
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