Mercer Asbestos Removal Company removes potentially toxic asbestos insulation from buildings. There has been a

long$-$simmering dispute between the company's estimator and the work supervisors. The on$-$site supervisors claim the

estimators do not adequately distinguish between routine work, such as removing 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 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\mathrm{.}50$ to determine the bid price.

Because our average cost is only $$2\mathrm{.}01$ per square foot, that leaves enough cushion to take care of the additional costs

of nonroutine work. 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 gathered the following activity$-$based costing data:

Note: The $100$ nonroutine jobs are included in the total of $400$ jobs. Both nonroutine jobs and routine jobs require

estimating and setup.

Required:

Perform the first$-$stage allocation of costs to the activity cost pools.

Compute the activity rates for the activity cost pools.

Calculate 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.