Mercer Asbestos Removal Company removes potentially toxic asbestos nsulation and related products from bulidings. 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 sution around heating pipes in older homes, and nonroutne 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 simply mutiply the square footage by $3.20 to determine the bid price. Since our average cost is only $2.805 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 touune 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 Activity Measure Total Activity Removing asbestos Thousands of square feet 856 thousand square feet Estimating and job setup Number of jobs 1400000 Worlding on monroutine jobs Number of nonroutine jobs Tee nonroutine jobs Other (organization-sustaining costs and Idle capacity costs) Note: The 10e nonroutine jobs are included in the total of 420 jobs. Both monroutine Jobs and routine Jobs require estimating and setup. $ 4:40.ee 324,000 100.000 Costs for the Year Wages and salaries Disposal fees Equipement depreciation On-site supplies Ottice ses Licensing and insurance Total cost 340,eee se, cee $ 2,316,000 des Distribution of resource Consumption Across Activities Reaving Asbestos Wages and salaries Sex Disposal tees zex Equipment depreciation On-site supplies Ottice expenses Licensing and Insurance working on Nowoutine 3e 30% 2 1er Ger Oh 101 es ex Total 100% es 13 10 ex 100% 100% 10% 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 orch of the following jobs according to the activity-based costing system. a. A routine 1000-square-foot asbestos removal Job. b. A routine 2000-square-foot asbestos removal job c. A nonroutine 2.000-square-foot asbestos removal job. Complete this question by entering your answers in the tabs below. Regt Reg JA to SC Other Total Perform the first stage allocation of costs to the activity cost pools. Removing Estimating Working on and Job Nonroutine Jobs Wages and salaries Disposales Equipment apreciation One Supplies