The Skyways Company Is Currently Selling Its Single Product for $15

Multiple Choice

The Skyways 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 Skyways increases its selling price by 10%, its variable cost ratio will:

A) not change.
B) decrease.
C) increase.
D) Cannot determine with the information given.