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The following data pertains tocthe operations od Alpha Corporation for the year ended December 31, 2019, its first year of operations. Alpha Corporation makes computer equipment. Round ending incentory computationa to the mearest dollar.Requires:1. Prepare an income ststement for the year using the absorption costing approach.2. Prepare an incomenststememt forntheyear using the direct costing approach.3. What is the difference between the net income or loss computed under the two methods?Analyze:Assume thst alpha coporation’s manufacturing managers believe thst only those cost that contribute directly to production should be assigned to cost of goods manufactured. Which costing method would these managers prefer?
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