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 $3.00 to determine the bid price. Since our average cost is only $2675 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 REVIEW Cost Pool Activity Measure Total Activity Removing nabeston Thousands of square feet 800 thousand square feet Encinating and job setup Number of jobs 500 job Working on nonroutine jobs Number of nonroutine jobs 100 nonroutine jobs Other (organization-sustaining conta and idle capacity costs) None Note: The 100 nonroutine jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup Concs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Ortice expenses Licensing and insurance Total cost $ 123,000 802,000 96,000 62.000 320,000 510.000 $ 2,213,000 Distribution of Resource Consumption ACESS Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Wages and salaries 501 101 304 Diaponal fees 700 08 301 Equipment depreciation SOL 101 154 On-site supplies 604 301 104 otrice expenses 104 254 Licensing and insurance 258 04 608 Other 104 08 251 08 301 158 Total 1000 1000 1005 1005 100% 1005 35% 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