Materials mix variance

The materials mix variance measures the cost effect of combining raw materials in proportions that differ from the standard blend, holding total input quantity constant; a favourable variance means cheaper inputs were substituted, but.

ByHoang TruongUpdated July 3, 2026

FrameworkMix and yield variances

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A food manufacturer's standard recipe calls for 60% premium grain and 40% standard grain. Actual production instead used a 50/50 blend, substituting cheaper standard grain for some of the premium share. Holding total input constant, that shift produces a favourable materials mix variance — a saving from the blend alone, before checking what it did to yield.

Where it fits

SubjectManagerial AccountingAdvancedTopicStandard Costing & Variance AnalysisAdvanced

The formula

LaTeX

\text{MMV} = \sum_{i} \bigl[(p_i \times Q_T) - q_i\bigr] \times s_i

Variables

$p_{i}$: standard proportion of material i in the total input blend (decimal, e.g. 0.60 for 60%) (decimal)
$Q_{T}$: total actual input quantity of all materials combined in the period (kg or units)
$q_{i}$: actual input quantity of material i used in production during the period (kg or units)
$s_{i}$: standard price per unit of material i (€ per kg or unit)

Positive result is favourable, indicating a cheaper blend than standard was used. Must be read alongside the yield variance: a favourable mix achieved by substituting cheaper ingredients may cause an adverse yield that more than offsets the apparent saving.