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Question
(i) Cost of Revenue from Operations (Cost of Goods Sold) ₹2,20,000; Revenue from Operations (Net Sales) ₹3,20,000; Selling Expenses ₹12,000; Office Expenses ₹8,000; Depreciation ₹6,000. Calculate Operating Ratio.
(ii) Revenue from Operations, Cash Sales ₹4,00,000; Credit Sales ₹1,00,000; Gross Profit ₹1,00,000; Office and Selling Expenses ₹50,000. Calculate Operating Ratio.
Solution
(i) Operating Expenses = Selling Expenses + Office Expenses + Depreciation
= 12000 + 8000 + 6000 = 26000
Cost of Goods Sold = 2,20,000
Operating Cost = Cost of Goods Sold + Operating Expenses
Operating Cost = 2,20,000 + 26,000 = 2,46,000
Sales = 3,20,000
Operating Ratio = `"Operating Ratio"/"Net Sales" xx 100`
`= 246000/320000 xx 100 = 76.875 %`
(ii) Net Sales = Cash Sales + Credit Sales
= 400000 + 100000 = 500000
Cost of Goods Sold = Net Sales - Gross Profit
= 500000 - 100000 = 400000
Operating Expenses = Office and Selling Expenses = 50,000
Operating Cost = Cost of Goods Sold + Operating Cost
= 400000 + 50000 = 450000
Operating Ratio = `"Operating Cost"/"Net Sales" xx 100`
`= 450000/500000 xx 100 = 90%`
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|
|
Rs |
|
Current Assets |
35,000 |
|
Current Liabilities |
17,500 |
|
Inventory |
15,000 |
|
Operating Expenses |
20,000 |
|
Revenue from Operations |
60,000 |
|
Cost of Goods Sold |
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|
|
Rs |
|
Inventory in the beginning of the year |
10,000 |
|
Inventory at the end of the year |
5,000 |
|
Carriage |
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Revenue from Operations |
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|
Particulars |
₹ |
||
|
Share Capital |
5,00,000 |
||
| Reserves and Surplus | 2,50,000 | ||
| Net Fixed Assets | 22,50,000 | ||
| Non-current Trade Investments | 2,50,000 | ||
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|
Long-term Provision |
NIL |
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