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What does a drop in total operating cost mean? What does a rise in net income...

What does a drop in total operating cost mean?

What does a rise in net income mean?

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Answer #1

A Drop in total operating cost means when total operating cost decreases as compared to earlier operating cost being incurred. A Drop may be due to less number of units produced or decrease in operating cost due to productivity initiatives taken by the organisation or decrease in material cost or decrease in rental for factory or decrease in labor cost due to restructuring etc.

A Rise in Net Income means the increase in income. A rise in income may be due to less cost or increased selling price or increase in number of units sold. A Rise in net income can have many reasons like a drop in total operating cost, increase in revenue, increase in industry share etc.

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