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:

3) Create a tab named "Q2". Complete a "Department and Production Line Income Statement" using VMOH Direct Method Allocation, Physical Measure Joint Cost Allocation, and Variable Costing Income Statement Format. Your answer should follow the template shown below and be in a tab named "Q2". Hints are shown in yellow highlights in the template below. (40 marks) 12 | Page DP World Fairview Container Port Partial Income Statement for Period Ended December 31, 2020 Department and Production Line Income Load / Unload Container Statement using VMOH Direct Method Load / Unload Non- Total Load / Powered Units Decontamination Allocation, Physical Measure Joint Cost Powered Units (2,400 Unload Total [ 800 containers Department (400 Allocation, and Variable Costing Income containers per day} Department perday) containers perday Statement Format Revenues 5XXX, 624, 000 Variable Costs Allocated Variable Joint Costs Direct Materials Direct Labour Allocated VMOH Total Varlable Costs Contribution Margin 5,986,000 Perlod Costs Fixed Costs period Operating Costs Total Perlod Costs Operating Income before Tax 586 695, 0005i 5} 13| 7'} Create a tab named \"Q4". DP World wanted to achieve an overall Retum on Investment {ROI} of 14.50 percent [uses]. Did they achieve it? In a written paragraph in a separate tab called \"Q4", inform management what the overall ROI was for 22t} in percentage form and in dollars. This should be a professionally: written memorandum to Senior Management commenting on the overall achievementtnon achievement of expected ROI. {1D marks] Create a tab named "(315". DP World is committed to boosting the terminal's capacity by another third by 2022. In paragraph form in the tab called "(15\". recommend to management what business department they should concentrate on to improve the bottom line. This should be a professionally written memorandum to Senior Management commenting on what they should focus on to improve the bottom line. Hint: think: like a cost accountant. Why are we using the Variable Costing Income Statement Format? What does it highlight? {1U marks] Create a tab named \"Q6". DP World is highly interested in building the hotel that Rattenbury planned over 1l1tl years before. All of the architectural drawings can he found in the BC Museum archives in Victoria. The building would cost $12t'i million to build and would have a total of SDI] guest suites. For the planned hotel, food servioes Net Income is projected at $4 million per year1 and banquet facilities Net Income is forecast at $1 million per year. Room revenues have not been projected: however costs per room is expected to be 80% of the revenue per room. DP World would expect a yearly ROI of fteen percent [15%). Should they build it? In paragraph form along with any calculations in a separate tab called \"Hotel\". recommend to management if they should build the hotel and show nancial plus any other reasons why or why not. This should be a professionally written memorandum to Senior Management commenting on the viability of the hotel. {11} marks} 5} Optional. Create a tab named \"QT-\"The Titanic II, a close replica of the 1912 Titanic anise liner will set sail in 212122. The Titanic II is the brainchild of Australian businessman Clive F'almer, who established a shipping company called Blue Star Line in 2D12 in order to make the project a reality. The ship is under construction now and is expected to cost $5 million. The new ship will start out in China, where it's currently under consthction, traveling to Dubai before picking passengers up in Soulhampton, England and following the original vessel's 1912 route across me Atlantic to New York City. After oompleting its journey to New York, the Titanic II will \"circumnavigate the globe, inspiring and enchanting people while attracting unrhtaled attention, intrigue, and mystery in every port she visits," stated Palmer. The only Canadian stop on the world tour will be in Prince Rupert as a tribute to Charles Melville Hays. Optional - for 5 bonus marks, in the\"?\" tab, explain why you would, or why you would not. sail on the \"new Tltanio". [Maximum mark on the total assignment is 1111] marks including the bonus 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 $9, 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% 100.0% Information Services Budgeted Computer Hours 5,000 20,000 25,000 50,000 Percentage 10.0% 40.0%% 50.0% 100.0% Create a tab named "Q1". Your answer should follow the following template. Hint - the Total for "Container Decontamination Department" is between: $2,400,000