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 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 $2.80 to determine the bid price. Since our average cost is only $2.305 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 on activity-based costing study of all of its costs. Data from the activity-based costing system follow: Activity Cont Pool Activity Measure Total Activity Removing anbenton Thousands of square feet 800 thousand square feet Estimating and job setup Number of jobs 400 job Working on nonroutine jobs Number of nonroutine jobs 100 nonroutine joba Other (organization-suntaining costa and idle capacity conta) Notei The 100 nonroutine jobs are included in the total of 400 joba. Noth nonroutine jobs and routine jobs require estimating and detup. None costs for the Year Hages and salaries Disposal foon Equipment depreciation On-site supplies office expenses Licensing and insurance Total cont 332,000 740,000 90,000 54,000 240.000 440,000 $ 1,896,000 Distribution of Resource Consumption across Activities Removing Estimating and Working on Asbestos Job Setup Nonroutine Jobs Wages and salaries 508 108 308 Disposal fees 700 08 308 Equipment depreciation 400 56 204 On-site supplies 609 25$ - 158 office expenses 108 400 159 Licensing and insurance 256 08 608 Other Total 105 1008 08 100% 356 1000 08 1009 356 1009 158 1009 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