Question :
Calculate Operating ratio -
|
Particulars |
Amount |
|
Revenue from Operations |
600000 |
|
Gross profit |
20% |
|
Office Expense |
30000 |
|
Selling Expense |
48000 |
Option 1: 80%
Option 2: 95.33%
Option 3: 85%
Option 4: 93%
Answer (1)
24th Jan, 2024
Correct Answer: 93%
Solution : The operating ratio is calculated by dividing a company's total operating costs by its net sales.
Hence the operating ratio is -
Company total operating cost = Office exp. + Selling Exp. + Cost of goods sold
= Rs.[30000 + 48000 + 480000 (600000 - 20%)]
= Rs.558000
Total revenue from operation = Rs.600000
= Rs.558000/Rs.600000
= 93%
Hence the correct answer is option 4.
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