Abc Company. at its current production capacity of 200,000 machine hours. At this point total overhead costs amounted to 560,000. Of this amount 360,000 amounts to depreciation expense. Inspection costs 60,000 (all variable). The remaining costs are communication costs (mixed costs). At 85,000 production capacity, communication expenses were P64,000. 2 machine hours are needed to produce 1 unit.

How much is the variable cost per machine hour?