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 belleve that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sumis 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 $2755 per square foot, thot leuves 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 Measure Total Activity Removing asbestos Thousands of square feet 800 thousand square feet Estimating and job setup Number of jobs 100 jobs working on nonroutine jobs Number of nonroutine Jobs 100 no routine jobs other organization-sustaining costs and idle capacity costs) None Note: The 100 no routine 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 Disposal fees Equipment depreciation On-site supplies office expenses Licensing and insurance Total COST $ 420,000 814,000 96,000 62,000 320,000 520,000 $ 2,232,000 nehnute Neyt Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup Cost or the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies office expenses Licensing and Insurance Total cost $ 420,000 0114,000 96.000 62.000 320,000 520.000 $2,232.000 100 100% Distribution of Mesource Consumption Across Activities Estimating Working on Removing and Job Honroutine Asbestos Setup Jobs Other Total Wages and salaries 50x 15% 20 15% 100% Disposal fees 60 OX 03 Equipment depreciation 40% 5% 2015 35X On-site supplies GA Box 101 100 office expenses 15% 2015 30% 100% Licensing and insurance 251 OX 60 15 100 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 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. 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 2000-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 3C Perform the first stage allocation of costs to the activity cost pools Removing asbestos Estimating and Job Setup Working on Nonroutine Jobs Other Total $ 0 0 Wages and salanes Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost OOOO $ 0 $ 0 $ 0$ OS Reg1 Reg 2 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A to 3C Compute the activity rates for the activity cost pools. Activity Cost Pool Removing asbestos Estimating and job setup Working on nonroutine jobs Activity Rate per thousand square feet per job per nonroutine job