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Smith Industries is a manufacturer whose absorption costing income statement reported sales of $28 million...

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Accounting

Smith Industries is a manufacturer whose absorption costing income statement reported sales of $28 million and a net operating loss of $2.5 million for the year. According to a CVP model, Smiths break-even point is $24 million in sales. Assuming the CVP model is correct, what most likely happened to inventory levels during the year?

1.Decreased

2.Remained the same

3.Increased

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