Pheonix was a professional classical guitar player until a motorcycle accident left 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 sell for $700, and the fixed monthly operating costs are as follows:

Rent and utilities	$800
Wages and benefits to luthier	2,500
Other expenses	480

Pheonix's accountant told him about contribution margin ratios, and Pheonix understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and anything above that point was profit. Pheonix is planning to increase the sales price to $750. What impact will the increase in sales price have on the contribution margin ratio?

A.

It will stay the same.

B.It will increase to

53.33%.

C.It will increase to approximately

62.67%.

D.It will decrease to approximately

49.33%.