subject
Business, 18.02.2020 22:02 alannaamarriee

Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. 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 ceiling plaster in industrial buildings. 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 $2.175 per square foot, that leaves enough cushion 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 until 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 Activity Measure Total ActivityRemoving asbestos Thousands of square feet 800 thousand square feetEstimating and job setup Number of jobs 500 jobsWorking on non-routine jobs, Number of non-routine jobs, 100 non-routine jobsOther (organization-sustaining costs and idle capacity costs) None Costs for the YearWages and salaries $300,000Disposal fees 700,000Equipment depreciation 90,000On-site supplies 50,000Office expenses 200,000Licensing and insurance 400,000Total cost $1,740,000Distribution of Resource Consumption Across ActivitiesRemoving Asbestos Estimating and Job Setup Working on Non-routine Jobs, Other Total1. Wages and salaries 50 % 10 % 30 % 10 % 100 %2. Disposal fees 60 % 0 % 40 % 0 % 100 %3. Equipment depreciation 40 % 5 % 20 % 35 % 100 %4. On-site supplies 60 % 30 % 10 % 0 % 100 %5. Office expenses 10 % 35 % 25 % 30 % 100 %6. Licensing and insurance 30 % 0 % 50 % 20 % 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 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 non-routine 2,000-square-foot asbestos removal job.

ansver
Answers: 2

Another question on Business

question
Business, 21.06.2019 19:30
Which of the following correctly describes the accounting for indirect labor costs? indirect labor costs are product costs and are expensed as incurred. indirect labor costs are period costs and are expensed when the manufactured product is sold. indirect labor costs are period costs and are expensed as incurred. indirect labor costs are product costs and are expensed when the manufactured product is sold.
Answers: 3
question
Business, 22.06.2019 08:40
During january 2018, the following transactions occur: january 1 purchase equipment for $20,600. the company estimates a residual value of $2,600 and a five-year service life. january 4 pay cash on accounts payable, $10,600. january 8 purchase additional inventory on account, $93,900. january 15 receive cash on accounts receivable, $23,100 january 19 pay cash for salaries, $30,900. january 28 pay cash for january utilities, $17,600. january 30 firework sales for january total $231,000. all of these sales are on account. the cost of the units sold is $120,500. the following information is available on january 31, 2018. depreciation on the equipment for the month of january is calculated using the straight-line method. the company estimates future uncollectible accounts. at the end of january, considering the total ending balance of the accounts receivable account as shown on the general ledger tab, $4,100 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). the company estimates that 50% of the past due balance will be uncollectible and only 3% of the current balance will become uncollectible. record the estimated bad debt expense. accrued interest revenue on notes receivable for january. unpaid salaries at the end of january are $33,700. accrued income taxes at the end of january are $10,100
Answers: 2
question
Business, 22.06.2019 19:00
By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology. however, the costs of producing electric autos may increase because of higher costs for inputs (e.g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i.e., learning by doing). what is the expected impact of these changes on the equilibrium price and quantity for electric autos?
Answers: 1
question
Business, 22.06.2019 19:00
Tri fecta, a partnership, had revenues of $369,000 in its first year of operations. the partnership has not collected on $45,000 of its sales and still owes $39,500 on $155,000 of merchandise it purchased. there was no inventory on hand at the end of the year. the partnership paid $27,000 in salaries. the partners invested $48,000 in the business and $23,000 was borrowed on a five-year note. the partnership paid $2,070 in interest that was the amount owed for the year and paid $9,500 for a two-year insurance policy on the first day of business. compute net income for the first year for tri fecta.
Answers: 2
You know the right answer?
Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products f...
Questions
question
Mathematics, 10.04.2021 19:20
question
History, 10.04.2021 19:20
question
Computers and Technology, 10.04.2021 19:20