HomeCha Company specializes in making special bags. During the year, HomeCha produced 3,000 bags. After final inspection, it was determined that 300 bags were spoiled and 100 bags were defective, but can be reworked. The following were incurred in producing the 3,000 bags:

o Direct materials, P2,325,000 o Direct labor, P600,000 o Applied overhead (based on direct labor cost), P1,200,000 HomeCha is confident that the spoiled bags can be sold for P600 each. The direct material and direct labor cost in reworking each defective bag were P300 and P125, respectively.

1. Assuming that the spoiled and defective goods were charged to all jobs, what is the unit cost of each good unit? 2. Assuming that the spoiled and defective goods were related to exacting specifications, what is the unit cost of each good unit?