Okinawa Industries produces two bearings: C15 and C19. Data regarding these two bearings follows:

	C15	C19
Machine hours required per unit	2.00	2.50
Standard Cost per Unit
Direct Materials	2.50	4.00
Direct Labor	5.00	4.00
Manufacturing Overhead
Variable (applied on the basis of DLH)	3.00	2.50
Fixed (applied on the basis of MH)	4.00	5.00
Total	14.50	15.50

The company requires 8,000 units of C15 and 11,000 units of C19. Recently, management decided to devote additional machine time to other product lines, resulting in only 31,000 machine hours per year that can be dedicated to production of the bearings. An outside company has offered to sell Okinawa the bearings at prices of P13.50 for C15 and P13.50 for C19.

QUESTIONS:

1. Assume that Okinawa decided to produce all C15s and purchase C19s only as needed. How many C19s shall be purchased? (#1) ________

2. Manufacturing a unit of C15 is (#2) (more or less?) ______ beneficial than purchasing by (#3) ___________ per unit. (doo not take into consideration any machine hours constraint)

3. Manufacturing a unit of C19 is (#4) (more or less?) ______ beneficial than purchasing by (#5) ___________ per unit. (doo not take into consideration any machine hours constraint)

4. Okinawa lacks sufficient machine time to produce all of the C15s and C19s needed. Component (#6) (C15 or C19?) _________ should be manufactured first with the limited machine hours available, for a differential contribution margin of (#7) ________ per hour. (round off your answer to two decimal places)