Polysar Case

2, 2, 0, 5,1, 4,1, 3, 0, 0, 1, 4, 4, 0,1, 4, 3, 4, 2, 1

2.) What is the ‘relevant range’ for the cost structure? In other words, at what volume might you expect the fixed and variable costs to change appreciably?

Base: All (2,077), 16-24 (179), 25-34 (257), 35-44 (394), 45-59 (541), 60-74 (454), 75+ (252)

|1 |$ 60 |$ 45 |$ 105 |$ 60 |$ 45 |$ 105 |$ 45 |

M e d i c a t i o n e r r o r s a r e a m o n g t h e l e a d i n g c a u s e s o f p r e v e n t a b l e i l l n e s s , h e a l t h c r i s i s , o r f a t a l i t i e s w i t h i n t h e t r e a t m e n t c o n t e x t h e a l t h c a r e s y s t e m ( A g e n c y f o r H e a l t h c a r e R e s e a r c h a n d Q u a l i t y , 2 0 0 1 ; C e n t e r f o r M e d i c a r e a n d M e d i c a i d S e r v i c e s , 2 0 1 0 ; I n s t i t u t e f o r H e a l t h c a r e I m p r o v e m e n t , 2 0 0 1 ; P t a s i n s k i , 2 0 0 7 ) .

Solutions: 1a 2c 3c 4d 5d 6c 7c 8d 9d 10a 11d 12a 13c 14c 15d 16c 17c 18b 19b 20c 21d 22a

G, L, H, D, B, M, N, I, E, O, J, P, K, F, C, A

• Introduction to Polysar • Standard Costing • Variance Analysis for Variable Costs • Fixed Overhead Volume Variance • Transfer Pricing

For NASA division, whether or not actual transferring to/from EROW will have no direct effect on its financial results, but the planned amount will do. Volume variance in NASA is computed as taking the difference between capacity 63,750 (annual capacity of 85,000 adjusted to 9 month) and actual production 47,500, and times standard fixed cost per unit $700 per tonne. Actual production is based on budget generated by EROW in previous year. The more EROW budgeted transferring from NASA, the less volume variance for NASA, thus the more favorable of the result.

After modifying the Fixed Cost Volume Variance, below we have a new Statement of Net Contribution with a positive Net Contribution of $4,414, which makes NASA as a division appear more profitable to Polysar.

665 0.34 174 216 537 234 122 1.2 0.2 60.4 9.6 0.22 65.0 2,149 554 66.6 2,483 80,300 492 14 23 6 21 15 874 524 12,216 30

If we compare the old job costing method with the Activity based costing method we can see in the table below that the activity base rate gives us a much more accurate insight in allocating the manufacturing overhead costs. In fact, the activity based overhead calculation shows us that the activity rates for Valves and Pumps are lower than the rates used in plantwide production rates, but the activity based rate for Flow Controllers is around 50% higher than the cost calculated in the job costing method. The reason for this difference in our opinion can be traced back to the high receiving and production control costs as well as packaging &

1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 0 5,000 10,000 15,000 20,000 25,000

The key component of Polysar’s strategy is to be a leader in high margin, specialty rubbers.   Rubber Group is running its two divisions, NASA and EROW as profit centers. In addition to the two operating profit centers, the Rubber Group includes a Global Marketing Department and a Research Division to communicate the product flow and improve on innovation.

6 95 111 135 155 160 114 55 33 41 92 91 91 61 67 118 136 131 94 26 11 8