3 part question

hapter 7 Graded Problems Saved Help 3 Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and been a long-simmering dispute between the company's estimators do not adequately distinguish between routine work, such as removal of as homes, and nonroutine work, suc related products from bulildings. There has estimator and the work supervisors. The on-site supervisors claim that the bestos insulation around heating pipes in older h as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervisors nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums ints up his position in this way. "My job is to measure the area to be cleared of asbestos. As directed by top management, I simply cleared of asbestos. As directed by top management, I simply multiply to determine the bid price. Since our average cost is only $2.175 per square foot, that leaves enough of the additional costs of nonroutine work that shows up. Besides, it is difficult to know what is routine or not routine until you actually start tearing things apart" eBook To shed light on this controversy, the company initiated an costing system follow: activity-based costing study of all of its costs. Data from the activity-based Print Activity Cost Pool Removing asbestos Estimating and job setup Working on nonroutine jobs other (organization-sustaining Activity Meas Activ ure Thousands of aquare feet Number of jobs Number of nonroutine jobe 800 thousand square feet 500 jobs costs and idle capacity costs) one Note: The 100 nonroutine jobs are ineluded in the total of 500 jobs. Both nonrout ine jobs and routine jobs require estimating and setup Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenaes Licenaing and insurance Total cost $ 300,000 700,000 90,000 50,000 200,000 1,740,000 Distribution of Reaource Consumption Across Activities Estinating Working on Removing and Job Nonroutine Asbestos Setup Jobs 308 OtherTotal 1004 Hages and salaries S01 10% 108