Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

During the previous financial year, R Limited recorded sales revenue of $190000 and operating expenses of $108000. For the current financial year, the directors believe that, if they raise advertising spending by $5000, sales revenue will rise to $205000. Operating expenses, excluding advertising, would rise by $7000. If the extra advertising were carried out, what would the operating expenses to revenue ratio be?

  • A56.10%
  • B58.54%
  • C158.33%
  • D170.83%

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