ok Mercer Asbestos Removal Company removes potentially todo asbestos insulation and related products from buildings. 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 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 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. I simply multiply the square footage by $320 to determine the bid price. Since our average cost is only $2805 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 routine 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 Hemoving asbestos Thousands of square feet 850 thousand square feet Estimating and job setup Number of jobs 400 Jobs Working on nonroutine Jobs Number of onroutine Jobs 100 no routine fobs othee (organization sustaining costs and Idle capacity costs) None Note The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup aces Costs for the Year Sages and salaries Osposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost $440,000 024,000 103,000 64.000 340,000 540.000 $ 2.318,000 Distribution of Resource Consumption Across Activities Estimating working on Removing and Job Nonroutine Asbestos Setup Jobs Mapes and salarles 50% 103 30% Disposal fees 70% SON Equipment depreciation 404 5% 20% On-site supplies JON 101 office expenses 15% 355 20% Licensing and insurance 30% 01 60% Other 10% Total 100% 100% 100% 100% 100% 100% 06 35% ox 30% 10% cox Homework i 40% Distribution of Resource Consumption Across Activities Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other Total Wages and salaries 50% 10% 30 10% 100% Disposal fees 70% ox 30x OR 100% Equipment depreciation 5% 20 35% 100% On-site supplies 60% 30% 10% OK 100% office expenses 15% 35 2013 30% 100% Licensing and insurance 30% OR 60% 10% 100% 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 each of th- 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 Anonroutine 2,000-square-foot asbestos removal job Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A to 30 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-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A monroutine 2,000-square-foot asbestos removal job. Show less Routine 1,000 Routine 2,000 square feet job square feet job Nonroutine 2,000 square feet job Total cost of the job Average Cost per thousand square feet