G Save & Exit Submit anment 6 Help 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 $3.00 to determine the bid price. Since our average cost is only $2.755 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 320 thousand square feet Estimating and job setup Number of jobs 420 Jobs Working on non routine Jobs Number of honroutine 100 100 no routine jobs Other organization-sustaining costs and idle capacity costs) None Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nontotine 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 5.420.000 314, eee 96.ee 62. 320,000 520.00 $ 2,232,00 204 Distribution of Resource Consumption across Activities Estimating working on Removing and Job Non routine Asbestos Setup Jobs Other Total Wages and salaries 524 154 154 100 Disposal fees 68 on 100 Equipment depreciation ON SA 354 1001 On-site Supplies 60 30 e 2003 office expenses 155 28 30 1004 Licensing and insurance 254 le Ignment 6 Saved Help Save 04 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Non routine Asbestos Setup Jobs Other Total Wages and salaries 504 15$ 20% 154 100% Disposal fees 68 09 405 1000 Equipment depreciation 404 54 209 35% 1004 On-site supplies 604 30% 10% 04 100% Office expenses 154 35 204 304 100 Licensing and insurance 25 09 604 15% 100% 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 t Perform the first stage allocation of costs to the activity cost pools. Removing asbestos Estimating and Job Setup Working on Nonroutine Jobs Total Other $ 0 0 0 0 Wapes and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost 0 0 0 $ 0 $ 0 $ 0 $ os Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Non routine Asbestos Setup Jobs Wages and salaries 50% 15% 20% Disposal fees 604 09 Equipment depreciation 404 5 20% On-site supplies 60% 30% 10% Office expenses 15% 354 20% Licensing and insurance 25% OR 60% 405 Other 15% 0% 35 Total 100% 1004 100% 1004 1004 100% 30 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req t Compute the activity rates for the activity cost pools. Activity Cost Pool Activity Rate Removing asbestos per thousand square feet Estimating and job setup per job Working on nonroutine jobs per nonroutine job rip bove ER suomat submit Other 35 10N Distribution of Resource Consumption Across Activities Estimating Working on Resoving and Job Non routine Asbestos Setup Jobs Totat Wages and salaries 50 15% 209 154 100 Disposal fees 60 09 401 ON 100% Equipment depreciation 40 54 205 1001 On-site supplies 605 309 100% office expenses 159 354 204 304 1001 Licensing and insurance 25 601 15 1001 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 routine 1000-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. Regi Rea 2 | Rega 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. D. A routine 2,000-square-foot asbestos removal job. A nonroutine 2,000-square-foot asbestos removal job. Show less Routine 1.000 Routine 2,000 square footjob square feet job Noncoutine 2,000 square feet jo Total cost of the job Average cost per mousand square feet