Page No
4.119:
Question
136:
Calculate Operating Profit Ratio, in each of the following
alternative cases:
Case 1: Revenue from Operations (Net Sales) ` 20,00,000;
Operating Profit
` 3,00,000.
Case 2: Revenue from Operations (Net Sales) ` 6,00,000; Operating
Cost ` 5,10,000.
Case 4: Revenue from Operations (Net Sales) `
3,60,000; Gross Profit 20% on Sales; Operating Expenses ` 18,000
Case 4: Revenue from Operations (Net Sales) ` 4,50,000; Cost of
Revenue from Operations
` 3,60,000; Operating Expenses `
22,500.
Case 5: Cost of Goods Sold, i.e., Cost of Revenue from
Operations `
4,00,000; Gross Profit 20% on Sales; Operating Expenses `
25,000.
Answer:
Case 1
Operating Ratio= Operating Cost/ Net Sales ×100
=3,00,000/20,00,000× 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=4,00000+20x/100
Or, 80x/100=4,00,000
Or, x=5,00,000
∴Sales = 5,00,000
Operating Cost = Cost of Goods Sold+ Operating Expenses
=4,00,000+25,000=4,25,000
Operating Profit = Net Sales- Cost of goods sold-Operation expenses
=5,00,000-4,00,000-25,000
=75,000
Operating Profit Ratio = Operating Profit/ Net Sales×100
=75,000×100/5,00,000=15%
Page No
4.119:
Question 137:
Operating Profit Ratio of star Ltd. is 20%. State, giving reason, which
of the following transactions will
(a) Increase (b) Decrease, or (c) not alter the Operation
Profit Ratio
(a) Purchases of Stock-in-trade `1,00,000
(b) Purchases Return `20,000
(c) Revenue from operation on sale of Stock-in-trade `1,25,000.
(d) Stock-in-trade Costing `25,000 withdrawn for personal use.
Assuming that operating cost is variable,
i.e., varies from operations.
Answers;
Transactions
|
Effect
|
Reason
|
(a)
|
No Change |
Both purchases and closing inventory will increase and hence Cost of Revenue from Operations win remain unchanged. |
(b)
|
No Change |
Both purchases and closing inventory wiu decrease and hence Cost of Revenue from Operations will remain unchanged. |
(c)
|
No Change |
Revenue from Operations will increase but closing inventory will decrease by the same percentage (not by the same amount). Therefore, Cost of Revenue from Operations will increase by the same percentage as the Revenue from Operations increase. |
(d)
|
No Change |
Both purchases and dosing inventory will decrease and hence Cost of Revenue from Operations will remain unchanged. |
Page No
4.119:
Question
138:
Cash Sales ` 2,20,000; Credit Sales ` 3,00,000; Sales Return ` 20,000; Gross Profit ` 1,00,000; Operating Expenses ` 25,000; Non-operating incomes ` 30,000; Non-operating Expenses ` 5,000. Calculate Net Profit Ratio.
Answer:
Net Sales= Cash Sales + Credit Sales - Sales Return
= 2,20,000+3,00,000-20,000
= 5,00,000
Net Profit = Gross Profit - Operating Expenses - Non-operating Expenses + Non-operating incomes
= 1,00,000-25,000-5,000+30,000
= 1,00,000
Net Profit Ratio= Net profit ×100/Net Sales
= 1,00,000×100/5,00,000
= 20%
Page No
4.119:
Question
139:
Revenue from Operations, i.e., Net Sales ` 6,00,000. Calculate Net Profit Ratio.
Answer:
Net Sales = 6,00,000
Net profit = 60,000
Net Profit Ratio= Net profit ×100/Net Sales
= 60,000×100/6,00,000
= 10%
Page No
4.119:
Question
140:
Revenue from Operations, i.e., Net Sales ` 8,20,000; Return ` 10,000; Cost of Revenue from Operations (Cost of Goods Sold) ` 5,20,000; Operating Expenses ` 2,09,000; Interest on Debentures ` 40,500; Gain (Profit) on Sale of a Fixed Asset ` 81,000. Calculate Net Profit Ratio.
Answer:
Net Sales= ` 8,20,000
Gross Profit = Net Sales - Cost of Goods Sold
= 8,20,000 - 5,20,000
= ` 3,00,000
Net Profit = Gross Profit - Operating Expenses - Interest on Debentures + Profit on Sale of Fixed Asset
= 3,00,000 - 2,09,000 - 40,500 + 81,000
= ` 1,31,500
Net Profit Ratio=Net Profit/Net Sales×100
=1,31,500/8,20,000×100
=16.04%
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