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The total fixed costs are the totals of the costs that remain the same in total regardless of changes in the activity level. The sales mix is the percentage that each product represents is total sales. An example of how all of these contribute to the CVP analysis will help in seeing how the process works and how it will be useful to a company.
In the first example we will see how an increase in unit selling prices will affect the contribution margin. The contribution margin is the amount of revenue remaining after deducting variable costs. Say that XYZ auto parts store sells a particular part for 100 dollars...
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