Stylish Chairs has a production budget of 600 chairs for the current year and for allocating the manufacturing overhead (i.e., indirect cost pool). Stylish Chairs uses the direct labour-hours for assembly and woodwork (carpenter) to allocate manufacturing overhead. Benny is not sure whether the production budget will be met and some of its consequences. Required a) If the quantity produced in the current year reaches the budgeted amount of 600 chairs whereas in the past year the production was 500 chairs, Benny says the per unit product cost in the current year will increase when compared to the previous year because the production has increased. Is Benny right or wrong in his statement and why? Use calculations for supporting your argument. (Chapter 2, 10 marks) b) Considering Stylish Chairs uses budgeted indirect costs during the year, if the quantity produced in the current year is only 550 chairs whereas the production budget for the current year is 600 chairs, Benny says there will be an overallocation of indirect costs. Is Benny right or wrong in his statement? What could lead to an overallocation or underallocation of indirect costs specifically for the chair? Use calculations for supporting your argument. (Budgeted indirect costs and end-of-period adjustments, Chapter 3, 10 marks)