Mercer Asbestos Removal Company removes potentlally toxic asbestos insulation and reiated products from buildings. There has been o long-simmeting 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 osbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervisors belleve that nonrouthe work is tar 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 $3.20 to determine the bid price. Since our averoge cost is only $2.805 per square foot, that leaves enough cushlon to take care of the additional costs of nonroutine work that shows up. Besides, it is difficuit to know what is routine or not. routine until you actublly start teoring things apart: To shed light on this controversy, the compony initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow: Note: The 100 nonroutine jobs ore included in the total of 400 jobs. Both nonroutine jobs and routine jobs roquire estimating and setup: 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 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 nonrouline 2,000-square-foot asbestos removal job. Complete this question by entering your answers in the tabs below. 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 following Jobs according to the activity-based costing system. a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-sojare-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. Compute the activity rates for the activity cost pools. Complete this question by entering your answers in the tabs below. 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 per thousand square feet" to 2 decimal places.) a. A routine 1,000-square-footasbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job
