Concept Of Material Mix Variance(MMV) And Its Formula For Calculation

Material Mix Variance (MMV)

The material mix variance is the result of a deviation of the actual composition of a mixture of material from the standard one. Normally, a material mix variance arises when there is a change in the composition of the material mixture, if more than one type of materials are used in a definite proportion. In such a situation, the material variance is calculated separately for each type of material. The material mix variance is calculated by using the following formula:
Material Mix Variance(MMV) = SP x (RSQ-AQ)
Where,
SP = Standard Price
RSQ = Revised standard quantity
AQ = Actual Quantity

Note: Please see the post "Calculation Of Direct Material Variances" for the calculation process of Material Mix Variance.