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The company uses absorbation cost when calculating manufacturing costs. Now studying a product named XY734. In the calculation, they distribute the manufacturing costs (TO) with direct salary as the base of charges, while the material cost (MO) is distributed with direct material as a base of orders. Below is a summary of the financial outcome for the year 2020.

Outcome: Costs 2018: the factory (all amounts in 1000s of dollars)
	Manufacturing department
		Manufacturing			painting/ assembly	Purchases	Total
	XY734	Car	Kit	In common	In common	In common
Material	800	180	135	20	50	30	1 215
Monthly salary	2 600	1 600	800	1 000	900	400	7 300
depreciation				800	100	50	950
Rent				500	70	50	620
Electricity				200	40	23	263
Other costs				100	357,5	171,75	957,5
Total	3 400	1 780	935	2 620	1 517,5	725	11 305,50
Quantity according to budget (pce)	20 000	5 000	10 000				35 000
Quantity according to result (st)	20 000	4 500	9 000				33 500

a) Calculate the post-calculated manufacturing cost of the product XY734 during the year 2020, according to it absorbation cost model that the uses.

b)What would the post-calculated manufacturing cost of the XY734 amount to if the company instead used a division calculation?

c)Which of the calculation models in data a (absorbation cost) and b (division calculation) would you recommend Polaris AB to use? Motivate your answer.

d) The company's new economist spoke the other day with the CEO) regarding the charge bases that used in the company. The economist wondered if it was not time to review these to increase if possible the precision of the calculations. CEO then replied that he had a hard time seeing the reason for this "because of course always in industrial companies use direct materials as a basis for distribution material costs and direct salary to allocate manufacturing costs. That's what we're always done and that is what we will always do . Discuss CEOs answers!