Read the following information from the books of ABCD Ltd. and answer the question.
|
Particulars |
2022 |
2021 |
|
Revenue from operations |
12,00,000 |
10,00,000 |
|
Cost of materials consumed |
6,60,000 |
6,00,000 |
|
Employee benefit expenses |
1,20,000 |
1,20,000 |
|
Other expenses |
96,000 |
50,000 |
What is the percentage of revenue from operations?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 100%.
Revenue from operations is taken as 100%. As revenue from operations is taken common base while preparing common size income statement.
COMMON SIZE INCOME STATEMENT
|
PARTICULARS |
2021 |
2022 |
2021 |
2022 |
|
I Revenue from operations |
10,00,000 |
12,00,000 |
100 |
100 |
|
Less: Expenses |
6,00,000 |
6,60,000 |
60 |
55 |
|
b) Employee benefit expenses |
1,20,000 |
1,20,000 |
12 |
10 |
|
c) Other expenses |
50,000 |
96,000 |
5 |
8 |
|
II Total expenses (a+b+c) |
7,70,000 |
8,76,000 |
77 |
73 |
|
Profit before tax (I-II) |
2,30,000 |
3,24,000 |
23 |
27 |