ACCOUNTING 245 Overhead Cost Allocation Activity Big Bob's Old Fashioned Furniture produces two products in the same manufacturing facility. The company has two cost pools - materials handling overhead (MHOH) and production overhead (POH). Company management has decided to use the number of pieces of wood used as the allocation base for MHOH and direct labor hours to allocate POH. Big Bob's makes pedestal tables and chairs. The facts for each items produced are given below. Activity or material Pieces of wood used in production of each unit 1 Table 1 Chair 10 3 Cost per piece of wood $11 $11 Labor Hours to produce each unit of good 16 8 Cost per Labor Hour $18 Budgeted number of units expected to be produced 100 $18 400 Estimated Materials Handling Overhead $6,490 Estimated Production Overhead $ 13,632 1. If materials overhead is allocated based on the total number of pieces of wood, what is the predetermined overhead application rate per piece of wood for materials handling overhead? 2. If production overhead is allocated based on the total number of labor hours, what is the predetermined overhead application rate per labor hour for production overhead? 3. What is the standard cost to produce a table? 4. What is the standard cost to produce a chair?