Until 31 December 20X6, TPI outsourced its entire sales administration function. Sales administration service costs amounting to and would have been incurred by Timberland and Manufacturing divisions respectively, during the year ending 31 December 20X7. However, a strategic decision was taken to establish an in- house sales administration division, known as the 'Admin' division, dedicated to servicing the needs of divisions Timberland and Manufacturing. The Admin division became operational on I January 20X7, and would not provide any service whatsoever to external parties. (1) (2) Budgeted information with respect to the year ending 31 December 20X7 is as follows: Division Average capital employed Profit before admin costs Timberland Smillion 39 10 Manufacturing Smillion 91 16 Admin Smillion 6.5 The management accountant has prepared a detailed analysis of the budget of the Admin division for the year ending 31 December 20X7 which is as follows: Salaries Consumable items IT costs Sundry operating costs Total Cost driver Activity volume Total $'000 4,100 1,000 1,000 7,000 Order Processing $'000 2,900 400 600 300 4,200 Invoice Generation $'000 450 450 100 400 1,400 Management Costs $'000 750 50 300 300 1,400 Sales orders 870,000 Invoices 700,000