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Explain variable costing and income statement, include inline citations then argue that variable costing and income statement can be adapted to service operations.

define each of the following terms, direct manufacturing item, indirect manufacturing item, variable manufacturing overhead, fixed manufacturing overhead, pre-determined manufacturing overhead, pre-determined manufacturing overhead rate, and the base for pre-determined manufacturing overhead rate. Then discuss if predetermined manufacturing overhead rate depends on production level. Provide examples to clarify and support your argument.

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