1. Provide general discussion on predetermined variable overhead criterion and its possible dependence on the activity for which it is used. Provide a variable costing income statement in which variable overhead is divided among different activities, and that each activity has its own predetermined variable overhead criterion. Explain your example in detail and provide in-text citations. 2. The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement. Allocation of Expenses to Departments Advertising Purchasing Books Magazines Newspapers Allocation Base Account Bal. Dept. Dept. Dept. Dept. Total department expenses... $698.000 $24.000 $34.000 $425,000 $90.000 $125,000 Service department expenses Advertising department. Sales Purchasing department... Purch, orders Total expenses allocated to operating departments. Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Expense Dept. 2 ? ? Department Sales Purchase Orders Books .... Magazines.. Newspapers Total.... $495,000 198,000 207,000 $900,000 516 360 324 1,200