I.All costs incidental to materials procurement and handling until they are issued are charged to the materials account by Cruz Mfg. Co. at a rate predetermined for each of the departments involved.

For 19C, the estimated departmental costs are given:

Purchasing department P175,000

Receiving and Inspection Dept.124,500

Materials department83,000

Accounting department (20% is 295,000

estimated to be relatedto

processing of paymentsfor materials.

Purchases for 19C were estimated to amount to P5, 000,000 for more or less 8,300,000 units to be ordered 50 times.

Actual purchases for 19C amounted to P5, 600,000 for total of 8,000,000 units in 52 orders. Costs incurred by the four given departments were as follows:

Purchasing departmentP180,000

Receiving and inspection department128,000

Materials department78,000

Accounting department (20% is estimated to be related290,000

processing of payments for materials.

Required:

a.Compute for the predetermined departmental overhead rates.

b.How much is the applied material handling cost per department?

c.How much is the material handling variance?