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-ste 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 romoving asbestos contaminated ceiling plaster In Industrial buildings. The on-site Supervisors believe that nonroutine work is far more expensive than routine work and should beat higher customer charges. The estimator sums up his position in this way. "My job is to measure the area to be deared of asbestos. As directed by top management. I simply multiply the square footage by $3.20 to determine the bid price. Since our average cost is only $2805 per solare 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 unul 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 city-based costing system follow Activity Cost Pool Activity Measure Total Activity Removing asbestos Thousands of square feet ase thousand wuare feet Estimating and So setup Number of Jobs 400 jobs Working on routine Jobs Number of contine Jobs 10 monroutine jobs Other (organization-sustaining costs and ide capacity costs) Note: The 100 outle jobs are included in the total of 40 jobs. Both toroutes and routine Jobs require estimating and setup 5 Costs for the Year Wages and salaries Disposal toes Equipment Depreciation On-site wples Orice expenses Licensing and insurance Total cost 410,000 824.000 100,000 340,000 50.000 $ 2,116,000 and Job Other Distribution of Resource Consumption Across Activities Estiu Moving Asbestos Selup Wages and salaries sos 20 Disposal fees 7 Equipment Depreciation 4 On-site supplies con Office expenses Licensing and insurance 10 Weingu routine Jobs 30 3 2x 33 30 Total 10 1 1 1 1 100 ces Required 1. Perform the first stage allocation of costs to the actvity 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 1000-square-foot asbestos removal Job b. A routine 2.000-square-foot asbestos removaljob. c. A nonroutine 2,000-square-foot asbestos removal job Complete this question by entering your answers in the tabs below. Reg1 Reg 2 Red BALOC Total Perform the first stage allocation of costs to the activity cost pools. Removing Estimating Working on asbestos and Job Nonroutine Viages and salaries Disposal fees Er depreciation On-she supplies Mercer Asbestos Removal Company removes potentially toxic asbestos Insulation and related products from bulidings. 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 celling 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 20 to determine the bid price. Since our average cost is only $2.805 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 Total Activity Removing asbestos Thousands of square feet 850 thousand square feet Estimating and job setup Number of jobs 100 Jobs working on nonroutine jobs Number of noroutine jobs 100 monroutine Jobs Other (organization-sustaining costs and idle capacity costs) None Note: The 100 no routine jobs are included in the total of 42 jobs. Both monroutine Jobs and routine Jobs require estimating and setup. Costs for the Year wages and salaries Disposal fees Equipment depreciation On-site pplies Office expenses Licensing and insurance Total cost $ 440,000 824,000 100.000 64.000 340.000 S40. $ 2,116,00 Distribution of our con Across Activities Estimating working on Moving and Job Noroutine Asbestos Setup Jobs and salaries 5 13 3 Disposales 3 foulent depreciation 40 20 Supplies 3 11 Office expenses 155 35 20 Licensing and in es 35 BE 3 1 100 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 1000 square foot asbestos removal job b. A routine 2000-square-foot asbestos removal job. A nonroutine 2000 square foot asbestos removal job. Complete this question by entering your answers in the tabs below. Reg Req Reg A to 3 Total Perform the first stage allocation of costs to the activity cost pools. Removing Estimating Working on asbestos and Job Nonroutine Setup Jobs Wages and sales Disposal fees Equipment depreciation On-she supplies $ 0