Question

Solve it please.....
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Answer 1

Answer:

Operating Ratio = 90%

Explanation:

Gross profit ratio = 20%

Accordingly,

Gross profit/Net Sales = 20/100

Or, Gross Profit/₹8,00,000 = 20/100

Or, Gross profit = 20/100 × ₹8,00,000

Or, Gross profit = ₹1,60,000

Net Sales = ₹8,00,000

Gross Profit = ₹1,60,000

Hence, Cost of goods sold =

₹8,00,000 - ₹1,60,000

₹6,40,000

Operating cost = Office and administration expenses + Depreciation + Cost of goods sold

Or, OC = ₹60,000 + ₹20,000 + ₹6,40,000

Or, OC = ₹7,20,000

Operating Ratio =

Operating Cost/Net Sales × 100

₹7,20,000/₹8,00,000 × 100

90%

I hope that it will help :)

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