**Materials price variance **is the difference between the actual quantity times the actual price and the actual quantity times the standard price for materials.

The materials price variance is computed from the following formula.

**(Actual Quantity * actual Price) – (Actual Quantity * Standard Price) = Materials Price Variance (MPV)**

The price variance can also be computed by multiplying the actual quantity purchased by the difference between the actual and standard price per unit. The formula is

**Actual Quantity * (Actual Price – Standard Price) = Materials Price Variance.**