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Mercer Asbestos Remaval Company removes potentialy toxic osbestos Insulation from bulldings. There has been a long - simmering dispute between the company's estimstor and the

Mercer Asbestos Remaval Company removes potentialy toxic osbestos Insulation from bulldings. There has been a long-simmering dispute between the company's estimstor and the work supervisors. The an-site supervisors clalm the estimators do not adequately distingulsh between routine work, such as removing asbestos Insulation around heating plpee in older homes, snd nonroutine work, such as removing asbestos-contaminsted celling plaster in industrial buldings. The on-alte supensors believe nonroutine work is for more expenalve than routine work and should bear higher customer charges. The eatmotor sums up his position In this woy. My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $280 to determine the bid price. Because our averoge cost ls only $2585 per square foot, that leaves enough eushlon to take care of the additional coste of nonroutine work. Besides, it is dificult to know what is routine or not routine untl you actually start tearing things opart"
To shed light on thls controversy, the company gathered the following actvity-based costing data:
Activity Cost Pool
Rectoving asbestos
Estinsting and job setup
working on norroutine jobs
other (organization-sustalning costs and 1010
caparity costs)
Actlvity Norune
Thousinds of squals fisit
Muter of jos
Metwer of rorritutine jobs:
None
Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobe and routine jobs require estimating and setup.
Costs for the Year
\table[[,\table[[$400,600
image text in transcribed

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