For this assignment, develop a response containing written narrative, figures, and charts.

View the Written Paper Grading Rubric.

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.

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 (5) 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 Expense Advertising Purchasing Books Magazines Newspapers Allocation Base Account Bal. Dept. 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...... Purchorders Total expenses allocated to operating departments.. ? S ? ?\fFixed Budget Report For Year Ended December 31, 2019 Sales . .. . . . ... .. .. . . $3,000,000 Cost of goods sold Direct materials . ... $975,000 Direct labor.. .... . . . . . 225,000 Machinery repairs (variable cost) ... .. . . . .... ...i 60,000 Depreciation-Plant equipment (straight-line) . 300,000 Utilities ($45,000 is variable) . . . . . . . . . . .* * 195,000 Plant management salaries 200,000 1,955,000 Gross profit . ..... . . . . . . 1,045,000 Selling expenses Packaging. . . ..... 75,000 Shipping ..... . . . . . . . . . . 105,000 Sales salary (fixed annual amount) . ...... 250,000 430,000 General and administrative expenses Advertising expense . . ... . . . .. . . .. 125,000 Salaries. . .. . . . . . . .. .. 241,000 Entertainment expense . .. . . . . . 90,000 456,000 Income from operations $ 159,000