P3. Coyote Inc. manufactures two products: regular tires and snow tires. To determine the amount of overhead assigned to each product line, the controller, Robert Hermann, has developed the following information. a. Assign overhead using traditional costing. Regular Snow Estimated tires produced 60,000 10,000 Machine hours pertire 2 3 Total estimated overhead costs for the two product lines are $900,000. Instructions 1: Compute the overhead cost assigned to the regular tires and snow tires, assuming that the machine hour is used to assign overhead costs. b. Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the snow tires product line because of its complexity. He, therefore, develops the following three activity cost pools and related cost drivers to better understand these costs. Estimated Use of Cost Drivers Activity Cost Pools Estimated Overhead Costs Setting up machines 500 setups $300,000 Assembling 7,000 labor hours 350,000 Inspection 250 inspections 250,000 Instruction 2: Compute the activity-based overhead rates for these three cost pools.