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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, 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 $2.235 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 cont Pool Activity Menu Total Motivity 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 joba 100 nonroutine joba Other (organization- staining coate and idle capacity costo) None Note: The 100 nonroutine jobs are included in the total of 500 goba. Both nonroutine jobs and routine Jobs require estimating and setup. Costs for the Year Wages and salaries Disposal teen Equipment depreciation On-site wupplies office expenses Licensing and insurance 317.000 712,000 97,000 55,000 220,000 420,000 Cost for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies office expenses Ticensing and insurance Total cost $ 317,000 712,000 97,000 55,000 220,000 420,000 $1,821,000 Distribution of Resource Consumption cross stivities Estimating Working on Removing and Job Non routine bestos Wages and salaries Setup Jobs SOS 256 200 Disposal fees 608 09 408 Equipment depreciation 500 156 On-site supplies 608 25 office expenses 154 101 40 150 Licensing and insurance 301 os 601 105 Other 151 03 250 09 356 101 Total 1001 1000 1000 1000 1008 1005 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 0. 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. 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. Req1 Rec 2 Req 3A to 30 Other Total Perform the first stage allocation of costs to the activity cost pools. Estimating Worldog on Romoving and Job Nonroutine asbestos Setup Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance TotalCout Req 1 Req 2 Req 3A to 30 Compute the activity rates for the activity cost pools. Activity Cost Pool Removing asbestos Estimating and job setup Working on nonroutine jobs Activity Rate per thousand square feet per job per nonroutine job Reg 1 Req 2 Req 3A to 3C 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. (Round the "Average cost per thousand square feet' to 2 decimal places.) 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. Show less Routine Routine Nonroutino 1,000 sq. ft. 2,000 sq. ft. 2,000 sq ft Job Job Job Total cost of the job Average Cost per thousand square feet