Mercer Asbestos Removal Company removes potentially toxic asbestos Insulation and related products from buldings. 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 celling plaster in Industrial bulldings. 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 $2.50 to determine the bid price. Since our average cost is only $2155 per square foot, that leaves enough cushlon 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 untl 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 Removing asbestos Estimating and job setup Working on nonroutine jobs Other (organization-sustaining costs and idle capacity costs) Note: The 180 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Activity Measure Total Activity Thousands of square feet Number of jobs Number of nonroutine jobs 1, eee thousand square feet 400 jobs 180 nonroutine jobs None Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance 328, eee 706, eee 9e, eee 53,0ee 230, eee 430, eee Total cost $ 1,837,00e Distribution of Resource Consumption Across Activities Estimating Working on Removing Asbestos and Job Nonroutine Jobs Other Total Setup 10% 10% Wages and salaries Disposal fees Equipment depreciation On-site supplies 20% 1eex 1eex 6ex 60% 40% 40% 5% 20% 35% 1ee% 70% 20% 10% ex 190% Office expenses 1ex 35% 35% ex 25% sex 30x 1ee% Licensing and insurance 15% 100% Requlred: 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 the 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 A nonroutine 2,000-square-foot asbestos removal job.