A firm needs two component parts X and Y, which can be manufactured or purchased. In producing the parts, factory overhead is applied at P1.00 per standard machine hour. The fixed capacity costs, which will remain unchanged, whether the parts will be produced or purchased represent 50% of the applied overhead. Standard costs and other information for the two component parts used by the firm are presented below:

Part X Part Y

Direct material P 0.50 P 12.00

Direct labor 1.50 7.00

Factory overhead 6.00 3.00

Unit standard costs P 8.00 P 22.00

Units needed per year 9,000 12,000

Machine hours per unit 6 3

Total hours available 45,000

Unit cost if purchased P 7.40 P 22.50

The relevant unit production costs that should be considered in the decision to schedule the 45,000 hours available machine time in order to realize the maximum potential cost savings are:

a. b. c. d.

X P 8.00 P 7.40 P 5.00 P 1.50

Y P22.00 P22.50 P20.50 P19.00