Multiple Choice
The Blue Company is currently selling its single product for $15.Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $4,800 per month.If Blue increases its selling price by 10%,its variable cost ratio will
A) not change
B) decrease
C) increase $15(.70) = $10.50
$15(1.10) = $16.50
$10) 50/$16.50 = 63.6% (vs.70%)
Correct Answer:
Verified
Correct Answer:
Verified
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