2. Hillary Company produces a part that has the following costs per unit:

Direct material	P 9
Direct labor	4
Variable overhead	2
Fixed overhead	6
Total	P21

Dreamland Corporation can provide the part to Hillary for P23 per unit. Hillary Company has determined that 50 percent of its fixed overhead would continue if it purchased the part. However, if Hillary no longer produces the part, it can rent that portion of the plant facilities for P70,000 per year. Hillary Company currently produces 12,000 parts per year. Which alternative is preferable and by what margin?