Bytelearn - cat image with glassesAI tutor

Welcome to Bytelearn!

Let’s check out your problem:

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\newlinec.) $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\newlinec.) $350\$350\newlined.) $200\$200
  1. Understand Contribution Margin: Understand what contribution margin per unit is.\newlineThe contribution margin per unit is the selling price per unit minus the variable cost per unit. This tells us how much each unit contributes to covering fixed costs and generating profit.
  2. Calculate Total Revenue: Calculate the total revenue from selling the shoes.\newlineRaji sold 5050 pairs of shoes at $300\$300 per pair. To find the total revenue, we multiply the number of pairs sold by the price per pair.\newlineTotal Revenue = Number of Pairs Sold ×\times Price per Pair\newlineTotal Revenue = 50×$30050 \times \$300\newlineTotal Revenue = $15,000\$15,000
  3. Calculate Contribution Margin: Calculate the contribution margin for all pairs sold.\newlineTo find the total contribution margin, we subtract the total variable costs from the total revenue.\newlineTotal Contribution Margin = Total Revenue - Total Variable Costs\newlineTotal Contribution Margin = $15,000\$15,000 - $5,000\$5,000\newlineTotal Contribution Margin = $10,000\$10,000
  4. Calculate Margin per Pair: Calculate the contribution margin per pair of shoes.\newlineTo find the contribution margin per pair, we divide the total contribution margin by the number of pairs sold.\newlineContribution Margin per Pair = Total Contribution Margin ÷\div Number of Pairs Sold\newlineContribution Margin per Pair = $10,000÷50\$10,000 \div 50\newlineContribution Margin per Pair = $200\$200

More problems from Evaluate two-variable equations: word problems