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Operating Ratio 92%; Operating Expenses ₹94,000; Revenue from Operations ₹6,00,000; Sales Return ₹40,000. Calculate Cost of Revenue from Operations (Cost of Goods Sold). - Accountancy

Sum

Operating Ratio 92%; Operating Expenses ₹94,000; Revenue from Operations ₹6,00,000; Sales Return ₹40,000. Calculate Cost of Revenue from Operations (Cost of Goods Sold).

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Solution

Revenue from Operations (Net Sales) = Rs 600000

Operating Ratio = 92%

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

`92 = "Operating Cost"/600000 xx 100`

Operating Cost =`(600000 xx 92)/100 = 552000`

Operating Cost = Cost of Goods Sold + Operating Expenses

5,52,000 = Cost of Goods Sold + 94,000

Cost of Goods Sold = Rs 4,58,000

*Note: Sales Return will not be considered since net sales are given which means sales return have already been adjusted in the sales figure. 

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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 3 Accounting Ratios
Exercise | Q 112 | Page 105
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