An unfavourable material quantity variance indicates that the actual usage of material exceeds the standard material allowed for output

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An unfavourable material quantity variance occurs when the actual amount of material used exceeds the standard amount allowed for the output. The direct materials price variance refers to the difference between the actual cost of materials purchased and the standard cost of materials that should have been purchased. The direct materials quantity variance refers to the difference between the actual quantity of materials used in production and the standard quantity of materials that should have been used. By calculating these variances, management can identify where the issue may lie, whether it be in purchasing or production, and take corrective action to improve the efficiency of the process.

An Unfavourable Material Quantity Variance Indicates That the Actual Usage