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: "Myjob 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 $2.575 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 activitybased costing study of all of its costs. Data from the activitybased costing system follow: Activity Cost Pool Activity Measure Total Activity Removing asbestos Thousands of square feet 866 thousand square feet Estimating and job setup Number of jobs 466 jobs Working on nonroutine jobs Number of nonroutine jobs 166 nonroutine jobs Other (organization-sustaining costs and idle capacity costs) None Note: The 166 nonroutine jobs are included in the total of 466 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Costs for the Year Wages and salaries $ 372,666 Disposal fees 775,666 Equipment depreciation 96,666 On-site supplies 58,666 Office expenses 286,666 Licensing and insurance 486,666 Total cost $ 2,661,666 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other Total Wages and salaries 66% 16% 26% 16% 166% Disposal fees 66% 6% 46% 6% 166% Equipment depreciation 56% 16% 15% 25% 166% On-site supplies 76% 26% 16% 6% 166% Office expenses 16% 46% 26% 36% 166% Licensing and insurance 25% 6% 66% 15% 166% Complete this question by entering your answers in the tabs below. Req 1 Req 3A to 3C 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 2,000squarefoot asbestos removal job. Show IessA Total cost of the job Average Cost per thousand square feet