If a company has a positive contribution margin but net operating income is low or negative, what are some ways of increasing net operating income?

Question

Quizplus · Accepted Answer

Increasing sales price, increasing sales volume, and decreasing variable costs all directly impact the contribution margin, which in turn affects net operating income. By increasing sales price or volume, the company can generate more revenue, while decreasing variable costs will increase the portion of each sale that contributes to net operating income. Therefore, all of these options can help increase net operating income.

If a Company Has a Positive Contribution Margin but Net