Set No.

Code No.220201

1

II-B.Tech. II-Semester –Supplementary-Examinations January-2003. MANAGERIAL ECONOMICS AND PRINCIPLES OF ACCOUNTANCY (common to Electrical and Electronics Engineering, Electronics and Instrumentation Engineering and Electronics and Control Engineering.) Time: 3 hours Max. Marks:80 Answer any FIVE questions All questions carry equal marks --What role does the managerial economist play in the business. Explain the need for distinguishing between durable and non-durable goods in demand forecasting. “Among the multiplicity of objectives that a modern firm has profit maximization continues to be the most important.” Comment. State the relationship between fixed cost, variable cost, total cost and marginal cost. Do fixed costs ever vary? Are variable costs ever fixed? From the following information calculate (a) Margin of safety (b) BEP in Rupees and in units (c) P/V Ratio (d) Profit when sales are Rs. 5,00,000 Information: Sales 5,000 units @ Rs. 20/- each ; Variable cost Rs.12/- per unit; Fixed cost Rs.25,000 Differenciate between traditional and discounted cash flow techniques of capital budgeting. Explain different types of business organizations what are the differences between proprietory and partnership business. Current Assets Rs.6,00,000; Current Liabilities Rs.1,20,000; Credit Sales Rs. 12,00,000; Cash Sales Rs.2,60,000; Sales returns Rs.20,000; Calculate working capital turnover Ratio. Fixed Assets (at cost) Rs.7,00,000; Accumulated depreciation till date Rs.1,00,000; Credit Sales 17,00,000; Cash Sales Rs.1,50,000; Sales returns Rs.50,000 . Calculate Fixed Assets Turnover Ratio. ---

1. 2. 3. 4. 5.

6. 7. 8.a) b)

Set No.
Code No.220201

2
Max. Marks:80 Answer any FIVE questions All questions carry equal marks ---

II-B.Tech. II-Semester –Supplementary-Examinations January-2003. MANAGERIAL ECONOMICS AND PRINCIPLES OF ACCOUNTANCY (common to Electrical and Electronics Engineering, Electronics and Instrumentation Engineering and Electronics and Control Engineering.) Time: 3 hours

1. 2. 3. 4. 5.

Explain various functions of Managerial Economist. “The quantity demanded of any good appears to depend upon utility, price and Income” – Elucidate? In normal and formal economic theory we often assume profit maximization. In reality, the firm do not maximize profit; in fact, they cannot” Comment. What are the determinants of cost behaviour. Enumerate different approaches for estimating cost functions. The sales of the company during the year is 10,000 units of 8/- each. Variable cost per unit is Rs.4/- Total fixed cost during the period is Rs.20,000. Calculate (a) BEP (b) New BEP if Fixed cost increases by 10% (c) New BEP if Variable cost decreases by 5% (d) New BEP if Selling price drops by 10%. Explain various steps involved in Capital budgeting technique. Explain various features and problems of public sector enterprises. The following are the ratios of the Kumar trading company Debdtors Velocity = 4 months Stock Velocity = 6 months Creditors Velocity = 3 months Gross Profit Ratio = 30% Gross Profit for the year ended Dec, 2002 amounts to Rs.5,20,000. Closing stock for the year is Rs.20,000 above the opening stock. Bills receivable is Rs.26,500 and bills payable is Rs.28,000. Find out sales, sundry debtors and sundry creditors. ---

6. 7. 8.

Set No.
Code No.220201

3

II-B.Tech. II-Semester –Supplementary-Examinations January-2003. MANAGERIAL ECONOMICS AND PRINCIPLES OF ACCOUNTANCY (common to Electrical and Electronics Engineering, Electronics and Instrumentation Engineering and Electronics and Control Engineering.) Time: 3 hours Max. Marks:80 Answer any FIVE questions All questions carry equal marks --“Managerial Economics is economics applied in decision making”- Discuss. Differenciate between derived demand and Autonomous demand and superior goods and inferior goods. How far is profit maximization the basic objective of a firm. What are the reasons for limiting profits? Distinguish between: (a) Explicit cost and Implicit cost (b) Actual cost and opportunity cost (c) Fixed cost and semi-fixed cost. From the following information, calculate (a) Fixed cost (b) P/V Ratio (c) BEP (d) Margin of safety. Information Particulars Years 2000 2001 Sales Rs.3,00,000 Rs.4,00,000 Profit Rs. 40,000 Rs. 60,000 Explain the importance of operating cycle in estimating working capital needs. Differentiate between partnership and Joint stock companies. Explain the significance and utility of Ratio Analysis in financial decision making. ---

1. 2. 3. 4. 5.

6. 7. 8.

Set No.
Code No.220201

4

II-B.Tech. II-Semester –Supplementary-Examinations January-2003. MANAGERIAL ECONOMICS AND PRINCIPLES OF ACCOUNTANCY (common to Electrical and Electronics Engineering, Electronics and Instrumentation Engineering and Electronics and Control Engineering.) Time: 3 hours Max. Marks:80 Answer any FIVE questions All questions carry equal marks --Explain clearly the nature and scope of managerial economics. Define total Revenue, Marginal revenue and average revenue. How is the behavior of profit-maximizing firm different from that of revenuemaximizing firm. Discuss briefly the different cost concepts relevant to managerial decision of planning and control. From the following information calculate (a) Profit when sales are Rs.3,00,000 (b) New BEP if variable cost increases by 10% (c) Present BEP in units and in Rupees (d) P/V Ratio Information: Sales 10,000 units @ Rs.30 per unit; Variable Cost Rs.16/- per unit; Fixed Cost Rs.50,000 Explain different types of working capital. Distinguish between perfect competition and Monopoly. Following is the Balance Sheet of Balwant and company as on 31/03/02. Liabilities Assets Share capital 2,00,000 Fixed Assets 4,00,000 Reserves 1,00,000 Nominal Assets 1,00,000 Long term Loan 3,00,000 Sundry debtors 1,00,000 Sundry creditors 1,50,000 Stock 1,20,000 Bills payable 50,000 Cash in hand and at bank 80,000 _______ _______ 8,00,000 8,00,000 _______ _______ Calculate the following: (a) Current Ratio (b) Acid test ratio (c) Proprietory Fund Ratio and (d) debt-equity Ratio. ---

1. 2. 3. 4. 5.

6. 7. 8.

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