Compute the cost of a regular and special meal using the new overhe...

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Compute the cost of a regular and special meal using the new overhead pools and cost drivers. What explains the differences between these costs and the ones in Exhibit 1?
2. What is your assessment of the overhead pools and cost drivers that Ms. Canard has chosen? How, if at all, might they be improved?
3. Assuming the overhead pools and cost drivers better indicate actual costs, what should Mr. Larson do with this information? In answering this question, you should address the questions he raises at the end of the case.

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Answer 1:
The direct cost per meal and the occupancy overhead would remain the same as calculated in Exhibit 1. The administration and general (A & G) expenses are of interest and have been apportioned on the basis of cost drivers as discussed. The first overhead cost is purchasing overhead cost. This cost has been apportioned on the basis of total purchase orders for each meal as shown below in Table 1....

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