SOLUTION
Case 1 :
Operating Ratio = Operating Cost / Net Sales ×100
= 1,50,000 / 10,00,000 × 100
= 15%
Case II :
Operating Profit = Net Sales – Operating Cost
= 6,00,000 – 5,10,000
= 90,000
Operating Ratio = Operating Cost / Net Sales ×100
= 90,000 / 6,00,000 × 100
=15%
Case III :
Net Sales = 3,60,000
Gross Profit = 20% on Sales
Gross Profit = 20 / 100 × 3,60,000
= 72,000
Operating Profit = Net Sales – Operating Cost
= 72,000 – 18,000
= 54,000
Operating Ratio = Operating Cost / Net Sales ×100
= 54,000 / 3,60,000 × 100
= 15%
Case IV:
Net Sales = 4,50,000
Operating Profit = Net Sales – Cost of goods sold – Operation expenses
= 4,50,000 – 3,60,000 – 22,500
= 67,500
Operating Ratio = Operating Cost / Net Sales × 100
= 67,500 / 4,50,000 × 100
= 15%
Case V:
Gross profit = 20% on sales
Let Sales = x
Gross profit = x × 20 / 100
= 20x / 100
Sales = Cost Goods Sold + Gross Profit
X = 8,00000+20x / 100
Or, 80x / 100 = 8,00,000
Or, x =10,00,000
∴ Sales = 10,00,000
Operating Cost = Cost of Goods Sold + Operating Expenses
= 8,00,000 + 50,000
= 8,50,000
Operating Profit = Net Sales- Cost of goods sold – Operation expenses
= 10,00,000 – 8,00,000 – 50,000
= 1,50,000
Operating Profit Ratio = Operating Profit / Net Sales×100
= 1,50,000 / 10,00,000 × 100
= 15%