ch5_hw_qa2_part1_br Complete this question by entering your answers in the tabs below.Req 1Req 2Reg 3A to 30Perform the first-stage allocation of costs to the activity cost pools.RemovingasbestosEstimatingand JobWorking onNonroutineOtherTotalSetupJobsWages and salariesDisposal feesEquipment depreciationOn-site suppliesOffice expensesLicensing and insuranceTotal costOoo oo Mercer Asbestos Removal Company removes potentlally toxic asbestos Insulation and related products from buildings. There hasbeen a long-simmering dispute between the company's estimator and the work supervisors. The on-site supervisors claim that theestimators do not adequately distingulsh between routine work, such as removal of asbestos Insulation around heating pipes in olderhomes, and nonroutine work, such as removing asbestos-contaminated celling plaster in Industrial bulldings. The on-site supervisorsbelieve that nonroutine work Is far more expensive than routine work and should bear higher customer charges. The estimator sumsup his position in this way: "My Job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiplythe square footage by $2.50 to determine the bid price. Since our average cost is only $2.155 per square foot, that leaves enoughcushion to take care of the addltional costs of nonroutine work that shows up. Besides, It is difficult to know what is routine or notroutine until you actually start tearing things apart."To shed light on this controversy, the company Initlated an activity-based costing study of all of Its costs. Data from the activity-basedcosting system follow:Total ActivityActivity Cost PoolRemoving asbestosEstimating and job setupWorking on nonroutine jobsOther (organization-sustaining costsand idle capacity costs)Note: The 1ee nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routinejobs require estimating and setup.Activity MeasureThousands of square feetNumber of jobsNumber of nonroutine jobs1, e00 thousand square feet400 jobs100 nonroutine jobsNoneCosts for the YearWages and salariesDisposal feesEquipment depreciationOn-site supplies328, 000706, 00e9e, e0053,000230,000Office expensesLicensing and insurance430,e00Total cost$ 1,837, 000Distribution of Resource Consumption Across ActivitiesEstimatingWorking onRemovingand JobNonroutineAsbestosSetup10%JobsOtherTotalWages and salariesDisposal feesEquipment depreciationOn-site suppliesOffice expenses60%20%10%10ex60%40%1ee%40%5%20%35%100%70%20%10%10e%10%35%25%30%100%Licensing and insurance35%50%15%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 thefollowing 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.

Activity Based Costing This method is generally using to allocate the expenses which are incurred in…

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 the following Jobs accordıng 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.