Vance Asbestos Removal Company removes potentially toxic asbestos Insulation and related products from buildings. The company's estat has been involved in a long simmering dispute with the on site work supervisors. The on-site supervisors claim that the estimatoedoes not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in older homes and non-routine work, such as removing asbestos contaminated celling plaster in industrial buildings. The on-site supervisor believe that non-coutine work is for more expensive than routine work and should be 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 multiply the square meters by $1900 per thousand square metres to determine the bid pike Since our average cost is only sa 900 per thousand square metres that leaves enough cushion to take care of the additional costs of non-routine work that shows up. Besides difficult to know what is routine or not routine until you actually start tearing things apart To shed Boht on this controversy, the company initiated on ABC study of all of its costs. Data from the ABC wito follow Activity heaste TE eine bestos Thousands of war Estimating jobs Nasher of Jobs 56 non ne poti ob of routine job itine Jobs Other (costs of de capacity and ut the costs Lining costs) allocated to the The total number of jobs includes non-coutine jobs as well as routine jobs: Non-routine jobs as well as coutine jobs require estimating and setup work $ 200,000 Dispeval fees depreciation stelle offie 107,00 78,000 202,000 478,00 $1,950,000 Tutkost but this to Activity best pas nina Job Setup be ine Total 1 waarin Opales Et depreciation Onsite pli otrices Licensurance 355 to TO Requirect 1. Perform the first stage allocation of costs to the activity cost pools. Do not leave any empty spaces Input wherever required) Removing Estimating and Job Set Working on Non- routine Jone Othe 0 . 0 Wings and Depose Emprecation On supp oscopes Licensing and insurance cos 0 $ 05 05 Round your answer to 2 decimal blocos 2 compute the activity rates for the activity cost pools (Round your answers to 2 decimat pinces APO Eg and Dan Warung stones Activity per thousand more perint porno 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square metres of each of the following jobs according to the ABC system . A cutie 1000 square mette asbestos removal job. (Round your answers to 2 decimal places) Total cost of the job Average cost per thousand square metres b. A routine 2,000 square metre asbestos removal job. (Round your answers to 2 decimal places)
