• DP World paid Cdn$676 million to buy the container port called Fairview
• DP World spent an additional Cdn$200 million for an expansion that readied Fairview to accept the largest vessels at sea
• DP World's total investment was Cdn$876 million ($676 million purchase price + $200 million expansion cost).
• Of the $876 million invested by DP World into the Fairview container port, 95 percent ($788.4 million) was invested in the loading/unloading department assets and 5 percent ($43.8 million) was invested in the container decontamination department assets.
• The company expects the loading/unloading department to generate a Return of Investment (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 total joint variable costs for loading/unloading in 2020 was $36.5 million.
• In 2020, the loading/unloading department for DP World's Prince Rupert facilities handled on average 3,600 of the 45-foot containers per day. In 2020, the container decontamination department for DP World's Prince Rupert facilities handled on average 400 of the 45-foot containers per day
• The port variable overhead costs are allocated to the operating departments using the direct method.
• The costs for 2020 show the various rates related to the Fairview Container port as follows: 
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Transcribed Image Text:

Load /Unload Load /Unload Non- Contalner Total Costs Totals Powe red Units Powered Unlts Decontaminatlon Containers perday 3,600 800 2,400 400 DM Costs per Container $25.00 $8.00 $5.00 DML Costs per Container variable Manufacturing Allocated $48.00 $32.00 $5.00 Variable Joint Costs (Physical Measure to Load/Unload only) $35,500,000.00| Fixed costs percontainer Perod Operating Costs per Year $30.75 $2117,000 $10.00 $1.450,000 $30.75 $9,928,000 $5,351,000 Load /Unload Load /Unload Non- Contalner Total Costs Totals Powe red Units Powered Unlts Decontaminatlon Containers perday 3,600 800 2,400 400 DM Costs per Container $25.00 $8.00 $5.00 DML Costs per Container variable Manufacturing Allocated $48.00 $32.00 $5.00 Variable Joint Costs (Physical Measure to Load/Unload only) $35,500,000.00| Fixed costs percontainer Perod Operating Costs per Year $30.75 $2117,000 $10.00 $1.450,000 $30.75 $9,928,000 $5,351,000

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Question 1 For allocation of overheads by method other than direct allocation is done below 1 Calcul... View the full answer