DP world is a company which creates revenues through two operating departments, the loading/unloading ,Of the $876 million invested by DP World into the Fairview container port, 90 percent ($788.4 million) was invested in the loading/unloading department assets and 5% ($43.8 million) was invested in the container decontamination department assets. The other 5% was invested in corporate office which has an expected zero return. The company expects the loading/unloading department to generate an ROI of 15% per year before tax over the planned 20-year life of the current equipment and expects the container decontamination department to generate an ROI of 7% per year before tax over the planned 25-year life of the current equipment. The methodology that DP World uses to price its services for its shipping customers is to arrive at a cost that includes the ROI plus all applicable costs. Therefore, the total cost per container that is charged to a customer includes total costs plus the required ROI per container. DP World's $200 million expansion readied Fairview to accept the largest vessels at sea, which are increasingly favored by shippers seeking to load more containers to reduce costs. DP World has two operating departments, with the first department called loading/unloading and the second department called container storage. DP World operates 24/7 and is open 365 days per year. DP World has thefollowing container variable overhead costs,The port variable overhead costs are allocated to the operating departments using the direct method. By allocating the port's variable overhead costs, DP World is able to calculate a VMOH cost per container for each department.

Required: Complete your answers in an Excel document and create a separate tab for each of the following. Use the suggested template structures pictured below. 1) Allocate the Variable Manufacturing Overhead to the two operating departments using the following information. (10 marks). Support Departments Operating Departments Port Information Loading / Container Maintenance Services Unloading Decontamination Total Budgeted Port Variable Overhead costs before any interdepartmental cost allocations $9,000,000 $1,800,000 99, 804,000 $274,000 $20,878,000 Support Work Furnished by: Port Maintenance Budgeted labour hours 233,600 292,000 58,400 584,000 Percentage 40. 0% 50.0% 10.0% 100.096 Information Services Budgeted Computer Hours 5,000 20,000 25,000 50,000 Percentage 10.09 40.0% 50.0% 100. 096 Create a tab named "Q1". Your answer should follow the following template. Hint - the Total for 'Container Decontamination Department" is between: $2,400,000