Given the following information:
Revenue from Operations Rs. 3,40,000
Cost of Revenue from Operations Rs. 1,20,000
Selling expenses Rs. 80,000
Administrative Expenses Rs. 40,000
Calculate the operating ratio.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 70.59%
Operating ratio measures how much of the revenue from operations is used up by operating cost, that is, cost of revenue from operations plus operating expenses (selling and administrative).
Operating cost = Rs. 1,20,000 + Rs. 80,000 + Rs. 40,000 = Rs. 2,40,000
Operating ratio = Rs. 2,40,000 ÷ Rs. 3,40,000 × 100
Operating ratio = 70.59%
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
|
