Question

Calculate the amount of operating profit from the following balances:

Net sales 5,00,000
Cost of goods sold 3,00,000
Operating Expenses 1,20,000​

Answer 1

Answer:

Operating Profit = Net Sales - Cost of goods sold - Operating Expenses

=> 500,000 - 300,000 - 120,000

=> 80,000 Ans

Answer 2

Explanation:

Given :

• Net sales = 5,00,000

• Cost of Goods sold = 3,00,000

• Operating Expenses = 1,20,000

To find Operating Profit :

${\boxed{\frak{operating \: profit \: = gross \: profit - (administration \: + selling \: and \: distribution \: expenses) }}}$

${\boxed{\frak{operating \: Profit\: = gross \: profit \: - \: operating \: expenses}}}$

${\boxed{\frak{gross \: profit \: = net \:sales - cost \: of \: goods \: sold }}}$

So, first we have to find Gross profit ;

⟶ Gross Profit = 5,00,000 - 3,00,000

⟶ Gross Profit = 2,00,000

Hence, Gross Profit = 2,00,000

Then, we have to find Operating Profit , ( Administration + Selling and distribution expenses is called Operating expenses )

⟶ Operating Profit= 2,00,000 - 1,20,000

⟶ Operating Profit = 80,000

Hence, Operating Profit = 80,000.