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Question
Calculate Cost of Revenue from Operations from the following information:
Revenue from Operations ₹ 12,00,000; Operating Ratio 75%; Operating Expenses ₹ 1,00,000.
Solution
Given:
Revenue from Operations (Net Sales)=Rs 12,00,000
Operating Ratio=75%
Operating Expenses=Rs 1,00,000
Find out: Cost of Revenue from Operations
`"Operating Ratio" = "Operating Cost"/"Net Sales" xx 100`
`0.75 = "Operating Cost"/1200000`
Operating Cost = Rs 900000
Operating Cost = Cost of Revenue from Operations + Operating Expenses
900000 = Cost of Revenue from Operations + 100000
Cost of Revenue from OPerations = Rs 800000
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