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Chapters 2. Mereer A.sbestos Remaval Company removes potentially toxic asbertos inquation and related prodocts from butidines. The on-site supervisiors elaim that the cost estimator does
Chapters 2. Mereer A.sbestos Remaval Company removes potentially toxic asbertos inquation and related prodocts from butidines. The on-site supervisiors elaim that the cost estimator does not adequately distinguish between routine work, such ins removal of ashestos inswalatiom arpund heating pipes in older houmes, and nonroutine work, such is renoving asbestosicontaminated. ceiling plaster in industrial baildings. Fhe on-site sypervisors believe that nonnoutine work is far more expensive than routine work and should bear higher customer oharges. To shed light on this controversy, the company initiated an activity-bascd costing study of all of its costs. Dota from the activity-based costing system follow: The resource consumption table: 1) Prepare a report showing the fint-stage allocations of overhead costs to the activity cost pools. 2) Compute the activity rates for the activity cost pools 3) Using the activity rutes you have computed, deternine 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 2,000-square-foot asbestos removal job. b. A nonroutine 2,000-square-foot asbestos removal job. 1) Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2) Compute the activity rates for the activity cost pools
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