Question

Operating ratio 10%, operating expenses 94,000, sales 6,00,000, sales return 40,000
Calculate cost of goods sold.

Answer 1

sales - sales return = rfo

600000 - 40000 = 560000

operating ratio = operating cost /rfo × 100

let op. cost be X

10% =. X/ 5,60,000 ×100

0.1 = X/5600

X= 5600 × 0.1

X = 560 operating cost

operating cost =cost of rfo + operating expenses

560= 94000+ cost of rfo

cost of rfo= 94560