Rent and utilities Phoenix was a professional classical guitar player until a motorcycle accident bell him disabled. After long months of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars coll
for $705, and the fixed monthly operating costs are as follows:
5810
Wages and benefits to luthier $2,510
Other expenses
Phoenix's accountant told him about contribution margin ratios, and Phoenix understood clearly that for every dollar of sales, 80.60 went to cover his fixed costs, and anything above that point was profit
Phoenix is planning to increase the sales price to $750 What impact will the increase in sales price have on the contribution margin ratio?
$480
O A It will increase to 54%
OB. It will decrease to approacimately 50.4%
OC. It will stay the same
OD. It will increase to approximately 62 4%