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Can i get help with this question, with step by step instuctions? Thank you. https://www.chegg.com/homework-help/Managerial-Accounting-15th-edition-chapter-7-problem-18P-solution-9780078025631 E Chapter 7, Problem 18P 3 Bookmarks) Show all steps
Can i get help with this question, with step by step instuctions?
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https://www.chegg.com/homework-help/Managerial-Accounting-15th-edition-chapter-7-problem-18P-solution-9780078025631
E Chapter 7, Problem 18P 3 Bookmarks) Show all steps Problem Activity-Based costing and Bidding on Jobs Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the companys estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work such 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-site supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums 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 multiply the square footage by $2.50 to determine the bid price. Since our average cost is only $2.175 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: Activity Cost Pool Activity Measure Total Activity Removing asbestos Thousands of square feet 800 thousand square feet Estimating and job setup. Number of jobs 500 jobs Working on nonroutine jobs ..... Number of nonroutine jobs 100 nonroutine jobs Other (costs of idle capacity and organization-sustaining costs) ... None Note: The 100 nonroutine jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses........... Licensing and insurance Total cost $ 300,000 700,000 90,000 50,000 200,000 400,000 $1,740,000 Distribution of Resource Consumption Across ActivitiesStep by Step Solution
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