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 $2.675 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 Ramoving anbenton Thousands of square feet 800 thousand square feet Estimating and job wetup Number of jobs 500 job Working on monroutine jobs Number of nonroutine joba 100 no routine joba Other organisation-sustaining cont and Idle capacity costa) Note: The 100 nonroutine jobs are included in the total of 500 jobs. Both non routine jobs and routine jobe require estimating and setup. None Conta for the Year Wagon and salaries Disposal foon Equipment depreciation On-site supplies office expenses Licensing and insurance Total cost . 414,000 800,000 96,000 61,000 310.000 510.000 $ 2,197,000 Distribution of Resource Consumption Across Motivities Entinsting Working on Removing and Job Non routine Asbestos Setup Jobs Wages and salaries 500 101 308 Disposal fees 700 os 30 Equipment depreciation SO 101 150 On-site supplies 905 205 100 office expenses 100 350 251 Licensing and insurance 255 09 608 Other 101 00 251 08 300 151 Total 1000 1001 1001 1001 1008 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