Direct Material Mix Variance

Direct material mix variance is the variance used to analyze effect of changes in the mix of materials used on direct materials cost.

Formula

Direct material mix variance can be computed as:
[(Actual material mix percentage – Standard material mix percentage) x (Actual total units of material inputs used)] x (Standard individual price per unit of material input – Standard average price per unit of material inputs).

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.