Mercer Asbestos Removal Compony removes potentially toxic osbestos insulation and related products from buildings. There has

been o 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 os removing sabestos$-$contaminated ceiling plaster in industrial buildings. The on$-$site supervisors

believe that nonroutine work is for more expensive then routine work and should bear higher customer charges. The estimstor sums

up his position in this woy: $"$My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multipl?

the squsre footsge by $$4\mathrm{.}20$ to determine the bid price. Since our aversge cost is only $$2\mathrm{.}90$ per square foot, that lesves 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 stert tearing things oport."

To shed light on this controversy, the compony initisted an sctivity$-$bosed costing study of all of its costs. Dats from the sctivity$-$bseed

costing system follow:

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$-$stoge allocation of costs to the activity cost pools.

Compute the activity rates for the activity cost pools.

Using the octivity rotes you hove computed, determine the total cost and the sversge cost per thousond square feet of each of the

following jobs sccording to the sctivity$-$bseed costing system.

a$.$ A routine $1,000-$square$-$foot asbestos removal job.

b$.$ A routine $2,000-$square$-$foot ssbestos removal job.

c$.$ A nonroutine $2,000-$square$-$foot sabestos removal job.

Complete this question by entering your answers in the tabs below.

Required $2$

Required $3A$ to

$3C$

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