Study the information given below carefully and answer the following question.
| Particulars | 2020 (Amount in ₹) |
2019 (Amount in ₹) |
2018 (Amount in ₹) |
| Outstanding Expenses | 50,000 | 40,000 | 25,000 |
| Prepaid Expenses | 3,00,000 | 2,50,000 | 3,50,000 |
| Trade Payables | 18,00,000 | 16,00,000 | 14,00,000 |
| Inventory | 12,00,000 | 10,00,000 | 11,00,000 |
| Trade Receivables | 11,00,000 | 8,00,000 | 10,00,000 |
| Cash In hand | 17,00,000 | 12,00,000 | 15,00,000 |
| Revenue from Operations | 24,00,000 | 18,00,000 | 20,00,000 |
| Gross Profit Ratio | 12% | 15% | 18% |
Cost of Revenue from Operations for the year 2020 would be _____________________
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹21,12,000.
Gross profit ratio = Gross profit/ Revenue from operations x 100
12 = Gross profit/24,00,000 x 100
Gross profit = 12 x 24,00,000/100
= 2,88,000
Cost of Revenue = Revenue from operations - Gross profit
= 24,00,000 - 2,88,000
= 21,12,000