Question. A firm's credit revenue from operations is Rs.3,60,000, cash revenue from operations is Rs.70,000. Cost of revenue from operations is Rs.3,61,200. Its gross profit ratio will be:
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The Gross profit ratio will be 16%.
Given,
Credit Revenue from the operations = Rs. 3,60,000
Cash Revenue from the operations = Rs. 70,000
Cost of Revenue from operations = Rs. 3,61,200
We know that,
Revenue from operation= Cash revenue + Credit revenue
= 3,60,000 + 70,000
= 4,30,000
Therefore,
Gross profit= Revenue from operations - Cost of revenue from operations
= 4,30,000- 3,61,200
= 68,800
Gross profit ratio = Gross profit/Revenue from operations × 100
= 68,800/4,30,000 × 100
= 16%
Therefore, the gross profit ratio is 16%.
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