Assignment A. B. Based on the above information, use activity based costing to assess the total and per unit profitability of RFS's three loan products RFS is considering adding a new product line, Home Equity Loans, which RFS believes will make the mortgage business more attractive to their customers. RFS research shows they could originate 500 of these loans at $230 each. RFS would have to process a 3 page application, obtain 2 credit referrals from outside credit agencies, do 2.5 hours of loan analysis, and complete a 4 hour closing process, with 85% of applications being closed. RFS believes existing resources in the company can handle the additional application processing and loan analysis work. Using the cost driver rates you developed in part A, compute the estimated incremental and fully loaded profitability of this new line of business for RFS. Note: incremental analysis would only include the incremental costs that result from adding home equity loans. Write a brief memo (maximum 1 page, double spaced, font 12) to RFS management summarizing the results of your analyses. Make specific recommendations to RFS (1) to improve business profitability and (2) to add home equity loan business or not