Full explanation with formulas included

Fredy specialises in the manufacture of tablets, laptops and desktop PCs. FG currently operates a standard absorption costing system. Budgeted information for next year is given below: Products Sales revenue Direct material Direct labour Fixed production overheads Gross profit Tablets $000 3,640 800 300 Laptops Desktop PCs $000 $000 12,480 9,880 2,800 2,200 1,200 800 Total $000 26,000 5,800 2,300 1.456 1,084 4.992 3,488 3,952 2,928 10.400 7,500 Fixed production overheads are currently absorbed based on a percentage of sales revenue. Fredy is considering changing to an activity based costing system. The main activities and their associated cost drivers and overhead cost have been identified as follows: Activity Cost Driver Manufacturing scheduling Parts handling Assembly Software installation & testing Number of orders Number of parts Assembly time Number of software applications Number of units Production overhead cost $000 162 2,464 4,472 2,000 Packaging 1.302 10.400 Further details have also been ascertained as follows: Tablets 10,000 Laptops Desktop PCs 12,000 6,000 Budgeted production for next year (units) Number of orders Number of parts Assembly time per unit (minutes) Number of software applications per unit 1,000 200,000 20 20,000 2,000 420,000 40 36,000 1,500 150,000 30 24,000 REQUIRED: (a) Calculate the total gross profit for each product using the proposed activity based costing system. (16 marks)