Vance Asbestos Removal Company removes potentially toxic asbestos Insulation and related products from buildings. The company's estimator has been involved in a long-simmering dispute with the on-site work supervisors. The on-site supervisors claim that the estimator does 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 supervisors belleve that non-routine 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 metres by $4,900 per thousand square metres to determine the bid price. Since our average cost is only $3,900 per thousand square metres, that leaves enough cushion to take care of the additional costs of non-routine 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 ABC study of all of its costs. Data from the ABC system follow. Activity Measure Total Activity Activity Cost Pool Removing asbestos Thousands of square metres 500,000 Number of jobs 300 Jobs Estimating and job setup. Working on non-routine jobs Number of non-routine jobs 25 non-routine Jobs Other (costs of idle capacity and Not applicable; these costs are not allocated to jobs. organization-sustaining costs) *The total number of jobs Includes non-routine jobs as well as routine jobs. Non-routine jobs as well as routine jobs require estimating and setup work. Wages and salaries $ 290,000 Disposal fees 735,000 Equipment depreciation 107,000 On-site supplies 78,000 Office expenses 262,000 478,000 Licensing and insurance Total cost $1,950,000 Distribution of Resource Consumption across Activity Cost Pools Removing Working on Non- Estimating and Job Setup Asbestos routine Jobs Other 45% 10% 30% 15% Wages and salaries Disposal fees 70% ex 30% A Equipeent depreciation 40% ex 35% 25% On-site supplies 55% 25% SV Office expenses 10% 35% 15% Licensing and insurance 50% 40% 10% 15% 40% ex Total 100% 100% 100% 100% 100% 100% myat 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces, Input a 0 wherever it is required.) Removing Asbestos Estimating and Job Setup Working on Non- Other Totals routine Jobs Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses 0 Licensing and insurance 0 Total cost S 0 $ 0 $ 0 S 0 $ 0 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Removing asbestos per thousand square metres per job Estimating and job setup Working on non-routine jobs per non-routine job 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. A routine 1,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) Total cost of the job Average cost per thousand square metres $ 0 0 0 10