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 deared 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 $2175 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 Measur 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) Note: The 100 nonroutine Jobs are included in the total of 500 jobs. Both no routine Jobs and routine jobs require estimating and setup. None $ Costs for the Year Wages and salaries Disposal fees Equipe depreciation On-site supplies office expenses Licensing and insurance 300,000 700,000 99,000 50,000 200,000 400.000 Total cost $1,740,00 Working on Nonroutine Jobs Distribution of Resource Consumption Across Activities Estimating Removing and Job Asbestos Setup Wages and salaries ses 10% Disposal fees Gok 03 Equipment depreciation 401 SX On-site supplies ves office expenses 10% 35% Licensing and insurance 0% Other 10 Total 100 IX lou 100% 40% 205 10% 25% SOK 30% es 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 1000-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 30 Other Total Perform the first stage allocation of costs to the activity cost pools. Estimating Working on Removing and Job Nonroutine asbestos Setup Jobs Wages and salaries Disposal fees Equipment dopreciation On-site supplies Office expenses Licensing and insurance Total cost Req2 > Reg 1 Reg 2 Hag 3A to 30 Reg A to 30 Compute the activity rates for the activity cost pools. Activity Cost Pool Romoving asbestos Estimating and job setup Working on noncoutine jobs Activity Ratu per thousand square feet per job por nonroutine job Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A to 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. (Round the "Average cost per thousand square feet" to 2 decimal places.) a. A routine 1,000-square-foot asbestos removal fob. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000 square foot asbestos removal job. Show less Routing Routine Nonroutine 1,000 sq. ft. 2,000 sq. ft. 2,000 sq. ft. job job job Total cost of the job Average Cost per thousand square feet