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Raji custom-makes and sells dress shoes for 
$300 per pair. This past month, Raji sold 50 pairs of shoes. Raji knows his total cost for variable expenses was 
$5,000 for the month.
What was Raji's contribution margin per pair of shoes made?
a.) 
$60
b.) 
$100
a) 
$350
d.) 
$200

Raji custom-makes and sells dress shoes for $300 \$ 300 per pair. This past month, Raji sold 5050 pairs of shoes. Raji knows his total cost for variable expenses was $5,000 \$ 5,000 for the month.\newlineWhat was Raji's contribution margin per pair of shoes made?\newlinea.) $60 \$ 60 \newlineb.) $100 \$ 100 \newlinea) $350 \$ 350 \newlined.) $200 \$ 200

Full solution

Q. Raji custom-makes and sells dress shoes for $300 \$ 300 per pair. This past month, Raji sold 5050 pairs of shoes. Raji knows his total cost for variable expenses was $5,000 \$ 5,000 for the month.\newlineWhat was Raji's contribution margin per pair of shoes made?\newlinea.) $60 \$ 60 \newlineb.) $100 \$ 100 \newlinea) $350 \$ 350 \newlined.) $200 \$ 200
  1. Calculate Total Revenue: Determine the total revenue from selling the shoes.\newlineRaji sold 5050 pairs of shoes at $300\$300 per pair.\newlineTotal revenue = Number of pairs sold ×\times Price per pair\newlineTotal revenue = 50×$30050 \times \$300\newlineTotal revenue = $15,000\$15,000
  2. Find Contribution Margin Total: Calculate the contribution margin in total. Contribution margin = Total revenue - Variable expenses Contribution margin = $15,000$5,000\$15,000 - \$5,000 Contribution margin = $10,000\$10,000
  3. Calculate Contribution Margin Per Pair: Calculate the contribution margin per pair of shoes. Contribution margin per pair = Total contribution margin ÷\div Number of pairs sold Contribution margin per pair = $10,000÷50\$10,000 \div 50 Contribution margin per pair = $200\$200

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