Does the contribution margin and net operating income increase or decrease with 10 percent sale increase What happens to variable and fixed costs when sales increase by 10 percent?

With a 10 percent increase in sales, the contribution margin typically increases, as it represents the revenue remaining after variable costs are subtracted from sales. Since variable costs rise in proportion to sales, they will increase by 10 percent as well; however, fixed costs remain unchanged regardless of sales volume. Consequently, if the contribution margin increases and fixed costs remain stable, net operating income is likely to rise.