Question

DETERMINE THE AMOUNT OF REVENUE FROM OPERATIONS FROM THE FOLLOWING PARTICULAR . OPENING INVENTORY = 40000, INVENTORY TURNOVER RATIO = 6 TIMES ,GROSS PROFIT 20%OF REVENUE FROM OPERATIONS

Answer 1

Answer:

Inventory turniver ratio = cost of revenue from operation / average inventory

6 = cost of revenue from operation/ 40000

cost of revenue from operation ,= 240000

Revenue from operation = cost of revenue from operation + Gross profit

It is given that gross profit is 20% of Revenue from operation

Let revenue from operation be X

Revenue from operation = cost + Gross profit

X = Cost + X*20/100

X-X/5 = 240000

4X/5= 240000

4X= 1200000

X= 1200000/4

X= 300000

Revenue from operation = 300000