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Mercer Asbestos removes toxic asbestos from buildings. Thete has been a long simmering dispute between company estimators and supervisors. The supervisors claim estimwtors dont adequately
Mercer Asbestos removes toxic asbestos from buildings. Thete has been a long simmering dispute between company estimators and supervisors. The supervisors claim estimwtors dont adequately diatinguish between routine work, such as removing asbestos insulation arounf heating pipes in older homes and nontoutine work. The supervisor believes nonroutine work is far more expensive than routine work and should bear higher customer charges. Ine estimator sur to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $ to determine the bid price. Because our average cost is only $ 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 activitybased costing data:
tableActivity Cost Pool,Activity Measure,Total ActivityRemoving asbestos,Thousands of square feet, thousand square feetEstimating and job setup,Number of jobs, jobsWorking on nonroutine jobs,Number of nonroutine jobs, nonroutine jobsOther organizationsustaining costs and,,capacity costs
Note: The nonroutine jobs are included in the total of jobs. Both nonroutine jobs and routine jobs require estimating and setup.
tableCosts for the Year,Wages and salaries,$
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