What is the total operating expense ratio value as a decimal?

What is the total operating expense ratio value as a decimal?

• A. .50
• B. .67
• C. .75
• D. .80

Answer: (B)

The main idea here is that the total operating expense ratio shows what portion of gross revenue is consumed by operating costs. It’s calculated by dividing total operating expenses by gross farm income, and then expressing the result as a decimal (or as a percentage). A value of 0.67 means 67% of gross income goes to operating expenses, leaving about 33% as gross operating margin. This matches the answer because 0.67 is the decimal form of 67%, whereas the other numbers would imply lower or higher expense burdens (50%, 75%, or 80%). For example, if gross income is $100,000, operating expenses would be about $67,000.

The main idea here is that the total operating expense ratio shows what portion of gross revenue is consumed by operating costs. It’s calculated by dividing total operating expenses by gross farm income, and then expressing the result as a decimal (or as a percentage). A value of 0.67 means 67% of gross income goes to operating expenses, leaving about 33% as gross operating margin. This matches the answer because 0.67 is the decimal form of 67%, whereas the other numbers would imply lower or higher expense burdens (50%, 75%, or 80%). For example, if gross income is $100,000, operating expenses would be about $67,000.