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 celling 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 $2.455 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 its costs. Data from the activity-based costing system follow: Activity Cont Dool Activity Measure Total Metivity Removing asbestos Thousands of square feet 1,000 thousand square feet Estimating and job setup Number of jobs 500 job Working on monroutine Job Number of pooroutinosobo 100 monroutine Jobs Other (organization-bustaining costs and Lale capacity couto) None Note: The 100 nonroutine jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require ostimating and setup costs to the Yes Wages and snarios Disposal een Equipment dopriation On-sito supplies Ottico COD Licensing and in 407.000 100,000 05.000 56,000 300,000 430.000 12.142.000 30 DO 200 Dintrebution of Renource Communption Neront activation Estimating Working on Removing and Job Noncoutine beaton Setup Jobe Other Total Wages and salaries SON 100 300 10 100 Dlaposal for 100 ON 08 2001 Equipment depreciation 401 50 200 358 1001 On-site supplies 601 25 150 00 100 Ottice expenses 15 350 301 1091 Licensing and insurance 256 Os 604 150 tos 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 3. A routine 1,000 square foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job C. Anonroutine 2,000 square foot asbestos removal job