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CVP analysis involves specifying a model of the relations among the prices of products, the volume or level of activity, unit variable costs, total fixed

CVP analysis involves specifying a model of the relations among the prices of products, the volume or level of activity, unit variable costs, total fixed costs, and the sales mix. This model is used to predict the impact on profits of changes in those parameters. Explain how changes in activity affect contribution margin and net operating income.

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