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 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 $4 to determine the bid price. Since our average cost is only $2.175 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 Removing asbestos Estimating and job setup Working on nonroutine jabs Other (costs of idle capacity and organization-sustaining costs) Activity Measure Thousands of square feet Number of jobs Number of nonroutine jobs None Total Activity 530 thousand square feet 230 jobs 31 nonroutine jobs Note: The 31 nonroutine jobs are included in the total of 230 jobs. Both nonroutine jobs and routine jobs require estimating and setup. laries Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost $198.000 602,000 71.000 56.000 192,000 376,000 $1,495,000 Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Wages and salaries 39% 7% 34% Disposal fees 68% 0% Equipment depreciation 45% 09 30% On-site supplies 47% 6% 17% Office expenses 10% 37% 28% Licensing and insurance 48% 0% 35% 32% Other 20% 0% 25% 30% 25% 17% Total 100% 100% 100% 100% 100% 100% Requirement 1: Perform the first stage allocation of costs to the activity cost pools. (Leave no cells blank - be certain to enter"0" wherever required. Omit the "S" sign in your response.) Removing Asbestos Estimating and Job Setup Working on Nonroutine Jobs Other Total Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost Requirement 2: Compute the activity rates for the activity cost pools (Round your answers to the nearest dollar amount. Omit the "S" sign in your response.) Activity Cost Pool Job size Estimating and job setup Working on nonroutine jobs Activity Rate per thousand square feet per job per nonroutine job Requirement 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 to 2 decimal places and the total cost to the nearest dollar amount. Omit the "S" sign in your response.) (a) A routine 2,000-square-foot asbestos removal job. Total cost of the job Cost per thousand square feet (b) A routine 4,000-square-foot asbestos removal job. Total cost of the job Cost per thousand square feet (c) A nonroutine 2,000-square-foot asbestos removal job! Total cost of the job Cost per thousand square feet