Multiple Choice Questions on Purchases Rs7 20 000 Office Expenses Rs30 000 Selling Expenses Rs90 000 Opening Inventory Rs1 40 000........... for Commerce 12th Preparation

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Multiple Choice Questions

Purchases Rs7 20 000 Office Expenses Rs30 000 Selling Expenses Rs90 000 Opening Inventory Rs1 40 000...........

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    Purchases Rs7,20,000; Office Expenses Rs30,000; Selling Expenses Rs90,000; Opening Inventory Rs1,40,000; Closing Inventory Rs80,000; Revenue from Operations Rs12,00,000. Calculate operating ratio

    60%

    Incorrect Answer

    75%

    Correct Answer

    70%

    Incorrect Answer

    65%

    Incorrect Answer
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    Explanation:

    - Operating Ratio is calculated using the formula: [(Cost of Goods Sold + Operating Expenses) / Revenue from Operations] × 100.

    - Cost of Goods Sold (COGS) can be determined as: Opening Inventory + Purchases - Closing Inventory.

    - Here, COGS = Rs1,40,000 + Rs7,20,000 - Rs80,000 = Rs7,80,000.

    - Operating Expenses include both office and selling expenses.

    - Total Operating Expenses = Rs30,000 + Rs90,000 = Rs1,20,000.

    - Operating Ratio is thus: [(Rs7,80,000 + Rs1,20,000) / Rs12,00,000] × 100 = (Rs9,00,000 / Rs12,00,000) × 100 = 75%.

    - Option 2: 75%

    By: santosh
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