Direct Material Quantity Variance

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on May 02, 2023

Direct Materials Quantity Variance: Definition

Direct materials quantity variance is a part of the overall materials cost variance that occurs due to the difference between the actual quantity of direct materials used and the standard quantity allowed for the output.

Direct materials quantity variance is also known as direct material usage or volume variance. It indicates whether or not the material has been properly utilized.

A favorable materials quantity variance indicates savings in the use of direct materials. An unfavorable variance, on the other hand, indicates that the amount of materials used exceeds the standard requirement.

Formula For Direct Materials Quantity Variance

Direct Materials Quantity Variance Formula

Example: How to Calculate Direct Materials Quantity Variance

The Blue Sky Company provides the following data for the month of June 2016:

  • Direct materials used: 4,000 units
  • Standard quantity allowed: 4,200 units
  • Standard price per unit of direct materials: $5

Required: Calculate the direct materials quantity variance for Blue Sky Company. Indicate whether it is favorable or unfavorable.


Calculation of Direct Materials Quantity Variance

The direct materials quantity variance of Blue Sky Company, as calculated above, is favorable because the actual quantity of materials used is less than the standard quantity allowed.

Direct Material Quantity Variance FAQs

About the Author

True Tamplin, BSc, CEPF®

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

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, 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 or view his author profiles on Amazon, Nasdaq and Forbes.