Operating expenses to revenue ratio uses distribution costs divided by sales Steps:

• Calculate sales revenue: $750,000 +$220,000 + $250,000 +$75,000 = $1,295,000.
• Identify operating expenses as distribution costs of $220,000 (direct operational outflow).
• Compute ratio: ($220,000 /$1,295,000) × 100% ≈ 16.99%.
• Round to nearest option: 16.7%.

Why A is correct:

• Operating expenses to revenue ratio formula is (distribution costs / sales revenue) × 100%, yielding ≈16.7% per standard financial percentage calculation.

Why the others are wrong:

• B. 18.1% approximates administrative expenses to revenue (250,000 / 1,295,000 ≈ 19.3%), excluding distribution.
• C. 58.3% reflects cost of goods sold to revenue (750,000 / 1,295,000 ≈ 57.9%), not operating expenses.
• D. 59.7% overstates by incorrectly including partial COGS in operating expenses.

Final answer: A