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 $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: Activity Cont Pool Activity Measure Total divity Removing asbestos Thousands of square feet 800 thousand square feet Estimating and job setup Number of jobs 500 jobs Number of nonroutine jobs 100 nonroutine jobs Other (organization-sustaining costs and idle capacity costa) Note: The 100 nonroutine Jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup Working on nonroutine jobs None Conta for the Year Wagon and salaries Disposal feos Equipment depreciation On-site supplies ottice expenses Licensing and insurance Total cost $ 317,000 712,000 97,000 55,000 220,000 420,000 $ 1,821,000 151 1001 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other Total Wages and salaries 500 150 201 151 1000 Disposal fees 601 01 405 08 1008 Equipment depreciation 505 108 150 250 On-site supplies 1001 601 25 ON office expenses 100 401 150 351 1001 Licensing and insurance 30 00 605 101 1001 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