Purchase Solution

Increase the organization's operating income

Not what you're looking for?

Ask Custom Question

Could you please help me to understand these concepts:
Explain how producing more products that can be sold in a period can increase the organization's operating income. Is this a sustainable tactic to increase the organization's operating income? Would this happen in a service type company or is it an issue only in manufacturing companies? Explain.

Purchase this Solution

Solution Summary

This solution explains how producing more products that can be sold in a period can increase an organization's operating income. Additionally, the solution comments on this tactic. The solution includes the link to one source for further research of the topic.

Solution Preview

Selling more products can lead to an additional contribution margin which can increase the profit of the organization. The contribution margin is the difference between the sales and the variable cost. Hence, if additional sales are yielding positive contribution margin then only extra sales should be done. On the other hand, if the contribution margin is negative then it doesn't make sense to sell and produce additional products. The contribution margin per unit is the difference between the revenue and the variable ...

Purchase this Solution


Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.