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Parker Products, Inc. is a manufacturer whose absorption costing income statement reported sales of $123 million and a net operating loss of $18 million. According
Parker Products, Inc. is a manufacturer whose absorption costing income statement reported sales of $123 million and a net operating loss of $18 million. According to a CVP analysis prepared for management, the companys break-even point is $115 million in sales. Required: Assuming that the CVP analysis is correct, is it likely that the companys inventory level increased, decreased, or remained unchanged during the year? Explain.
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