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 $250 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 Cost Pool Activity Measure Total Activity Removing asbestos Thousands of square feet 800 thousand square feet Estimating and job setup Number of jobs 500 jobs Working on nonroutine Jobe Number of nonroutine jobs 100 no routine jobs other organization-containing costs and idle capacity costs) None Note: The 100 no routine Jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Costs for the Year Wages and salaries Disposal teen Equipment depreciation On-site supplies ottice expenses Licensing and insurance Total cost 5 317.000 712,000 97.000 55,000 220,000 420,000 $ 1,821,000 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbeston Setup Jobs Wages and salaries 500 15+ 205 Disposal fees 604 Ot 405 Equipment depreciation 501 101 155 On-site supplies 601 250 158 oftice expenses 101 401 150 Licensing and insurance 300 OR 608 Other 158 05 250 08 358 108 Total 1000 1001 1000 1008 1008 1000 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 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 Reg 1 Reg 2 Req 3A to 30 17 Other Total Perform the first stage allocation of costs to the activity cost pools. Estimating Working on Removing asbestos and Job Nonroutine Setup Jobs Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost Req2 > CH 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 ea 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. 7 Complete this question by entering your answers in the tabs below. 5 Reg 1 Reg 2 Req t Compute the activity rates for the activity cost pools. Activity Cost Pool Activity Rato Removing asbestos per thousand square foot Estimating and job setup per job Working on nonroutine jobs per nonroutine job Req 1 Reg 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-folt asbestos removal job. Show less Routine Routine 1,000 sq. ft. 2,000 sq. ft. Job job Nonroutine 2,000 sq.ft. job Total cost of the job Average Cost per thousand square