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Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There ha been a long-simmering dispute between the company's estimator and the work supervisors. The on-site supervisors claim that th estimators do not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in o homes, and nonroutine work, such as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervis believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sur ent, Isimply multi the square footage by $2.50 to determine the bid price. Since our average cost is only $2.435 per square foot, that leaves enough up his position in this way: "My job is to measure the area to be cleared of asbestos. As directed by top managem 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 ts costs. Data from the activtry-based costing system follow Activity Cost Poo1 Renoving asbestos Estinating and Job setup Working on nonroutine jobs Other (organization-sustaining Activity Measure Total Activit Thousands of square feet 1,000 thousand square feet Number of jobs Mumber ot nonroutine jobs 500 3obs 100 nonroutine joba costs and idle capacity costs) None lote: The 100 nonroutine jobs aze ineluded in the totai routine obs require eaimating and setup ot 500 Jobs. Both nonroutine jobs and Costa tor the Year 406,00 93.00D C Prey 17 Next > search

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