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Given the following information: {:(,...

Given the following information:
`{:(,,Rs.),("Revenue from Operations",,3_(,)40_(,)000),("Cost of Revenue from Operations",,1_(,)20_(,)000),("Selling expenses",,80_(,)000),("Administrative Expenses",,40_(,)000):}`
Calculate Gross profit ratio and Operating ratio

Text Solution

Verified by Experts

Gross Profit = Revenue from Operations – Cost of Revenue from Operations
=Rs. 3,40,000 – Rs. 1,20,000 =
Rs. 2,20,000
`"Gross Profit Ratio" =("Gross Profit")/("Revenue from operation")xx100`
`=(Rs.2,20,000)/(Rs.3,40,000)xx100`
`=64.71%`
Operating Cost = Cost of Revenue from Operations + Selling Expenses + Administrative Expenses =
= Rs. 1,20,000 + 80,000 + 40,000 =
= Rs. 2,40,000
Operating Ratio `=("Operating Cost")/("Net Revenue from Operations")xx100`
`=(Rs. 2,40,000)/(Rs. 3,40,000 )xx100`
`=70.59%`
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Knowledge Check

  • Total Revenue from Operations Rs. 15,00,000, Cost of Revenue from Operations Rs. 9,00,000 and Operating Expenses Rs. 2,25,000. Calculate operating ratio :

    A
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    B
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    C
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    D
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