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 $2.755 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 ACTIV Cost Pool Activity Measure Total Activity Renoviy asbestos Thousands of square feet 800 thousand square feet Estimating and job setup Number of jobs 400 jobs Working on non routine Jobs Number of nonroutine jobs 100 nonroutine Jobs Other organization-sustaining costs and Idle capacity costs) None Not Thn 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup Costs for the Year Wages and salaries Diposal fees Eouipment depreciation On-site supplies Office expenses Licensing and insurance Total cost $ 420,000 814,000 96,000 62,080 320,000 520,000 $ 2,232,000 Setup 15 Jobs other 154 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Non routine Asbestos Wages and salaries ses 205 Disposal fees 60% 484 Equipment depreciation 488 5 201 On-site supplies 105 Office expenses 359 20 KOS Total 1801 1801 1001 1001 100% Na 60 355 09 305 30% 15 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other Total Wages and salaries 509 15 200 15 1004 Disposal fees 605 04 40 09 1001 Equipment depreciation 404 5 205 354 On-site supplies 100% bes 304 104 es 1000 Office expenses 15 35 204 305 100 Licensing and insurance 259 es 601 154 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 Reg JA to 30 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-foot asbestos removal job. Show less Routine 1,000 Routine 2,000 square feet job square feet job Nonroutine 2,000 square footjob Total cost of the job Average Cost per thousand square feet