The difference between standard material cost and actual material cost on the basis of actual production is termed as Total Material Variance.
Formula
Material variance = Standard cost – actual cost
Example Question
The standard cost and actual cost of Alpha industry are as follows:
Standard Cost
Materials – 13,334 units @ $2 per unit = $26,668/-
Actual Cost
Materials – 13,666 units @ $1.86 per unit = $25,419/-
Total material variance = Standard material cost – actual material cost = 26,668 – 25,419 = $1,249/-