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I don't understand how to find the answers to these problems. I would like some help. Mercer Asbestos Removal Company removes potentially toxic asbestos insulation

I don't understand how to find the answers to these problems. I would like some help.

image text in transcribed 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 onsite 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 $2.80 to determine the bid price. Since our average cost is only $2.58 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 Removing asbestos Activity Measure Thousands of square feet Total Activity 800 Estimating and job setup Number of jobs 400 Working on nonroutine jobs Number of nonroutine jobs thousand square feet 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 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Costs for the Year Wages and salaries $ 372,000 Disposal fees 775,000 Equipment depreciation 96,000 On-site supplies 58,000 Office expenses 280,000 Licensing and insurance Total cost $ 480,000 2,061,000 Distribution of Resource Consumption Across Activities Removing Asbestos Total Estimating and Job Setup Working on Nonroutine Jobs Other % Wages and salaries 60 % 10 % 20 % 10 % 100 Disposal fees 60 % 0 % 40 % 0 % 100 % Equipment depreciation % 50 % 10 % 15 % 25 % 100 On-site supplies 70 % 20 % 10 % 0 % 100 % Office expenses 10 % 40 % 20 % 30 % 100 % 25 % 0 % 60 % 15 % 100 Licensing and insurance % Required: 1. Perform the first-stage allocation of costs to the activity cost pools. Removing Asbestos Estimating and Job Setting Working on/Nonroutine on Jobs Other total Wages Disposal fees Equipment Dep Onsite Supplies Other expenses Licensing and insurance Total Cost 1. Compute the activity rates for the activity cost pools Activity Cost pool Removing asbestos Estimating & job setting Working on nonroutine jobs Activity Per thousand sq f Per job Per no routine job 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" to 2 decimal places.) c. a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. A nonroutine 2,000-square-foot asbestos removal job

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