6 Mercer Asbestos Removal Company removes potentially toxic asbestos Insulation and related products from buildings. There has been a long-simmering dispute between the company's estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, Iuch as removal of asbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos contaminated ceiling plaster in industrial buildings. The on-tite supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sur up his position in this way: "My job is to measure the area to be cleared of asbestos. As directed by top management, imply multiply 24:22 the square footage by $3.60 to determine the bid price. Since our average cost is only $2.845 per square foot, that leaves enough cushion to take care 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." To shed light on this controversy, the company initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow: Is Activity Cost Pool Activity Measure Total activity Removing asbestos Thousands of square feet 750 thousand square feet Estimating and job setup Number of jobs 400 Jobs Working on nonroutine jobs Number of noncoutine jobs 100 nonroetine jobs Other (organization-sustaining costs and idle capacity cost None Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating setup Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost $ 460,000 862,000 104,000 66,000 360,000 560,000 $ 2,412,000 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Rohostne Taha nhar ta Eating and job setup Number of Job working on nonroutine Jobs Number of nonroutine Jobe other organisation-staining costs and Ldle capacity conta) None YANG 400 o 100 none oba Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup 40 Costs for the Year Wages and salarios Disposal fees Equipment depreciation On-site supplies offie expenser Licensing and insurance Total CORE 460,000 862.000 104,000 66,000 360,000 560,000 # 2,412,000 Distribution of Resource consumption Aeros Ativities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Hages and salaries 508 150 201 Disposal fees 700 ON 30 Equipment depreciation 501 100 150 On-site supplies 601 300 101 Office expenses 155 358 201 Licensing and insurance 258 os 601 Other 15 08 250 Total 1001 1008 100 100 1001 LOON 01 304 15 Required: 1. Perform the first stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system. a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job. 5 ortice expenses 158 358 205 308 1001 Licensing and insurance 250 505 156 1000 Required: 1. Perform the first stage allocation of costs to the activity cost pools 2. Compute the activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job. 0.01 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req t Perform the first stage allocation of costs to the activity cost pools. Working on Nonroutine Jobs Removing asbestos Estimating and Job Setup Other Total $ 0 0 0 Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost o o 0 $ 0 $ 0$ 0 $ 0 $ 0 e Reg Req 2 > Equipment depreciation Oraite supplies office expenses Licensing and Insurance Total cost 100,000 66,000 360.000 560.000 5 2.412,000 200 Distribution of Resource consumption across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other Total Wages and salaries 508 150 158 1001 Disposal fees 700 00 00 1008 Equipment depreciation 508 101 15 250 1000 On-site supplies 600 300 108 08 1000 office expenses 150 354 205 303 1001 Licensing and insurance 256 00 600 155 1000 Required: 1. Perform the first stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system, a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal Job. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A to 30 Perform the first stage allocation of costs to the activity cost pools. Other Working on Nonroutine Removing asbestos Total Estimating and Job Setup Inha