Option #2: Applying Activity-Based Costing South of the Border's frozen food division will be changing its product line to include two product offerings, a bean and cheese empanada and a shredded beef and cheese empanada. The empanadas are formed through a molding operation in which a flour tortilla is inserted into a heated mold, one of the two pre- made purchased fillings is inserted through a small hole in the mold into the shell of the tortilla, item is deep fried, cooled to room temperature, and then the finished product is removed from the mold and packaged for frozen storage and bulk palletized shipment. Below is information regarding the direct costs and volumes of the two major products Variable Cost and Volume Data Bean & Cheese Shredded Beef Raw materials $0.40 $0.75 Direct Labor $0.30 $0.45 Selling and General $0.05 $0.05 Volume in units 300,000 200,000 Sales prices of the two products are $1.95 for the bean and cheese empanada and $2.99 for the shredded beef empanada. The number of hours required to manufacture each unit was the same for both products. After interviewing the Factory and Production personnel, the division controller, Karen Solomon, prepared the following data table. From its simple cost structure, the company decided to reconsider its overhead pool and reallocate based on activity-based costing. Its simple overhead pool has been reclassified according to the ABC hierarchy within the following table