Question : Revenue from operations Rs. 6,80,000; Rate of Gross Profit on cost 25%; Selling expenses Rs. 1,44,000; Administrative expenses Rs. 73,000. The operating ratio will be
Option 1: 111.91%
Option 2: 100%
Option 3: 111%
Option 4: None of the above
Correct Answer: 111.91%
Solution : Answer = 111.91% Op. ratio= $\frac{COGS+op.exp}{\text{Net sales}}$×100
⇒ $\frac{5,44,000+1,44,000+73,000}{6,80,000}$×100
⇒ $\frac{7,61,000}{6,80,000}$= 111.91%. COGS+G.P= Net sales. ⇒ x+$\frac{x}{4}$=6,80,000 ⇒ $\frac{5x}{4}$= 6,80,000 ⇒ x= 6,80,000×$\frac{4}{5}$ ⇒ 1,36,000×4= 5,44,000. G.P= 1,36,000 COGS= 5,44,000 Hence, the correct option is 1.
Question : Revenue from Operations Rs. 9,00,000, Gross Profit 25% on Cost, Operating Expenses Rs. 90,000. Operating Ratio are
Option 1: 25%
Option 2: 30%
Option 3: 90%
Question : What is the formula for the Operating ratio?
Option 1: Cost of Production/Net revenue from operations.
Option 2: Cost of production + Operating Expenses/Net revenue from operations
Option 3: Cost of revenue from operations + Operating Expenses/Net Revenue from Operations
Question : Revenue from Operations Rs. 8,00,000; Gross Profit Ratio 25%; Operating Ratio 90%; Nonoperating Expenses Rs. 4,000; Non-operating Income T44,000. Net Profit Ratio will be
Option 2: 20%
Option 3: 15%
Option 4: 5%
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