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Question
| Particulars | ₹ |
| Revenue from Operations | 10,00,000 |
| Gross Profit | 40% |
| Office and Administrative Expenses | 80,000 |
| Selling Expenses | 70,000 |
| Interest on Debentures | 30,000 |
Operating Profit Ratio will be:
Options
22%
75%
32%
25%
MCQ
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Solution
25%
Explanation:
Operating Profit Ratio = `"Operating Profit"/"Revenue from Operations" xx 100`
Gross Profit = 40% of 10,00,000
= ₹ 4,00,000
Operating Expenses = Office and Administrative Expenses + Selling Expenses
= 80,000 + 70,000
= ₹ 1,50,000
Operating Profit = Gross Profit − Operating Expenses
= 4,00,000 − 1,50,000
= ₹ 2,50,000
Operating Profit Ratio = `(2,50,000)/(10,00,000) xx 100`
= 25%
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