Answer is complete and correct. Activity Cost Pool Activity Rate Vance Asbestos Removal Company removes potentially...

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Answer is complete and correct. Activity Cost Pool Activity Rate 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 distingulsh between routine work, such as removal of asbestos insulation around heating pipes in older homes, and non-routine work, such as removing asbestos-contaminated ceiling plaster in Industrial buildings. The on-site supervisors believe 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 $4,000 per thousand square metres to determine the bid price. Since our average cost is only $3,000 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." Removing asbestos Estimating and job setup per thousand square metres per job per non-routine job 1,558.00 375.00 Working on non-routine jobs 19,900.00 To shed light on this controversy, the company Initiated an ABC study of all of its costs. Data from the ABC system follow: 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: Total Activity Activity Cost Pool Removing asbestos Activity Measure Thousands of square metres 500, 000 m2 280 jobs* 25 non-routine jobs a. A routine 1,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) Estimating and job setup Working on non-routine jobs Other (costs of idle capacity and organization-sustaining costs) Number of jobs Number of non-routine jobs Not applicable; these costs are not allocated to jobs. X Answer is complete but not entirely correct. Total cost of the job $ 2,983.00 * 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. Average cost per thousand square metres $ 2,083.00 Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses $ 200,000 600,000 80,000 60,000 190,000 370,000 $1, 500,000 b. A routine 2,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) Licensing and insurance * Answer is complete but not entirely correct. Total cost Total cost of the job $ 3,461.00 $ 1,820.50 Distribution of Resource Consumption across Activity Cost Pools Working on Non- routine Jobs Cost per thousand square metres Removing Estimating and Job Setup Asbestos Other Total Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance 45% 10% 30% 15% 100% 70% 0% 30% 0% 100% 40% 0% 35% 25% 100% 55% 15% 25% 5% 100% c. A non-routine 1,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) 10% 40% 35% 15% 100% 50% 0% 40% 10% 100% Answer is complete but not entirely correct. Required. 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; Input a o wherever It Is required.) Total cost of the job 22.039.00 X Cost per thousand square metres $ 22,039.00 x Answer is complete and correct. Removing Asbestos Estimating and Job Setup Working on Non-routine Jobs Other Totals Wages and salaries 90,000 20,000 60,000 S 30,000 S 200,000 Disposal fees 420,000 180,000 600,000 Equipment depreciation 32,000 28,000 20,000 80,000 On-site supplies 33,000 9,000 15,000 3,000 60,000 Office expenses 19,000 76,000 66,500 28,500 190,000 Licensing and insurance 185,000 148,000 37,000 370,000 S 779,000 $ 118,500 2$ 1,500,000 Total cost 105,000 497,500 %24 %24 Answer is complete and correct. Activity Cost Pool Activity Rate 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 distingulsh between routine work, such as removal of asbestos insulation around heating pipes in older homes, and non-routine work, such as removing asbestos-contaminated ceiling plaster in Industrial buildings. The on-site supervisors believe 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 $4,000 per thousand square metres to determine the bid price. Since our average cost is only $3,000 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." Removing asbestos Estimating and job setup per thousand square metres per job per non-routine job 1,558.00 375.00 Working on non-routine jobs 19,900.00 To shed light on this controversy, the company Initiated an ABC study of all of its costs. Data from the ABC system follow: 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: Total Activity Activity Cost Pool Removing asbestos Activity Measure Thousands of square metres 500, 000 m2 280 jobs* 25 non-routine jobs a. A routine 1,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) Estimating and job setup Working on non-routine jobs Other (costs of idle capacity and organization-sustaining costs) Number of jobs Number of non-routine jobs Not applicable; these costs are not allocated to jobs. X Answer is complete but not entirely correct. Total cost of the job $ 2,983.00 * 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. Average cost per thousand square metres $ 2,083.00 Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses $ 200,000 600,000 80,000 60,000 190,000 370,000 $1, 500,000 b. A routine 2,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) Licensing and insurance * Answer is complete but not entirely correct. Total cost Total cost of the job $ 3,461.00 $ 1,820.50 Distribution of Resource Consumption across Activity Cost Pools Working on Non- routine Jobs Cost per thousand square metres Removing Estimating and Job Setup Asbestos Other Total Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance 45% 10% 30% 15% 100% 70% 0% 30% 0% 100% 40% 0% 35% 25% 100% 55% 15% 25% 5% 100% c. A non-routine 1,000-square-metre asbestos removal job. (Round your answers to 2 decimal places.) 10% 40% 35% 15% 100% 50% 0% 40% 10% 100% Answer is complete but not entirely correct. Required. 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; Input a o wherever It Is required.) Total cost of the job 22.039.00 X Cost per thousand square metres $ 22,039.00 x Answer is complete and correct. Removing Asbestos Estimating and Job Setup Working on Non-routine Jobs Other Totals Wages and salaries 90,000 20,000 60,000 S 30,000 S 200,000 Disposal fees 420,000 180,000 600,000 Equipment depreciation 32,000 28,000 20,000 80,000 On-site supplies 33,000 9,000 15,000 3,000 60,000 Office expenses 19,000 76,000 66,500 28,500 190,000 Licensing and insurance 185,000 148,000 37,000 370,000 S 779,000 $ 118,500 2$ 1,500,000 Total cost 105,000 497,500 %24 %24

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