Question

Calculate Cost of Revenue from Operations from the following information:
Revenue from Operations ₹ 12,00,000; Operating Ratio 75%; Operating Expenses ₹ 1,00,000.

Answer 1

Given: 

Revenue from Operations (Net Sales)=Rs 12,00,000 

Operating Ratio=75%

Operating Expenses=Rs 1,00,000 

Find out: Cost of Revenue from Operations 

`"Operating Ratio" = "Operating Cost"/"Net Sales" xx 100`

`0.75 = "Operating Cost"/1200000`

Operating Cost = Rs 900000

Operating Cost = Cost of Revenue from Operations + Operating Expenses

900000 = Cost of Revenue from Operations + 100000

Cost of Revenue from OPerations = Rs 800000