Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the companys estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, such as the 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 $2.50 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:

Data from the Activity-Based Costing System

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 jobs	Number of nonroutine jobs	100	nonroutine jobs
Other (organization-sustaining costs and idle capacity costs)	None

Note:

The 100 nonroutine jobs are included in the total of 500 jobs.

Both nonroutine jobs and routine jobs require estimating and setup.

Costs for the Year

Resource	Costs
Wages and salaries	$ 317,000
Disposal fees	712,000
Equipment depreciation	97,000
On-site supplies	55,000
Office expenses	220,000
Licensing and insurance	420,000
Total cost	$ 1,821,000

Distribution of Resource Consumption Across Activities

	Removing Asbestos	Estimating and Job Setup	Working on Nonroutine Jobs	Other	Total
Wages and salaries	50%	15%	20%	15%	100%
Disposal fees	60%	0%	40%	0%	100%
Equipment depreciation	50%	10%	15%	25%	100%
On-site supplies	60%	25%	15%	0%	100%
Office expenses	10%	40%	15%	35%	100%
Licensing and insurance	30%	0%	60%	10%	100%

Using the information above, you are required to complete the following:

Perform the first-stage allocation of costs to the activity cost pools.

Compute the activity rates for the activity cost pools.

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 routine 1,000-square-foot asbestos removal job.

A routine 2,000-square-foot asbestos removal job.

A nonroutine 2,000-square-foot asbestos removal job.

Flag question: Question 1

Question 131 pts

Section 1 | Perform the first-stage allocation of costs to the activity cost pools

Complete the following:

Create a table similar to or exactly like the one shown below.

Input the information and the correct data directly into the table where appropriate.

Please Note |

You are also required to show your work for each of the sections below.

Provide the correct data for each activity (worth 7 points).

Activities	Removing Asbestos	Estimating and Job Setup	Working on Nonroutine Jobs	Other	Total
Wages and Salaries	$	$	$	$	$
Disposal Fees
Equipment Depreciation
On-site Supplies
Office Expenses
Licensing and Insurance
Total Cost	$	$	$	$	$

Show your work (worth 24 points):

You are also required to show your work (provide calculations and the data used to obtain your response(s) to receive full credit) for each of the sections below.

Example: For each activity include the activity, the data (calculation methods), and the data used to obtain your response (see the example below for "Wages and Salaries."

How you can show your work directly into Canva:

Type the information in the space provided.

Create a table and include all required information.

Make sure all information is legible and formatted correctly to display data.

Bold and underscore the data total placed in your table.

Example: If the data total under "Wages and Salaries" for "Removing Asbestos" is $2,319; this would be bolded and underscored.

If you decide to upload this information in a separate document, please make sure it is typed, appropriately aligned, and all necessary information is included.

Only upload MS Word or PDF documents (Do not upload any format of google documents to this file).

Any inaccessible responses will automatically be scored 0% (no exceptions).

Wages and Salaries:

Removing asbestos =

Estimating and Job Setup =

Working on Nonroutine Jobs =

Other =