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
---
1. What role does the managerial economist play in the business.

2. Explain the need for distinguishing between durable and non-durable goods in
demand forecasting.

3. “Among the multiplicity of objectives that a modern firm has profit maximization
continues to be the most important.” Comment.

4. State the relationship between fixed cost, variable cost, total cost and marginal
cost. Do fixed costs ever vary? Are variable costs ever fixed?

5. 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

6. Differenciate between traditional and discounted cash flow techniques of capital

budgeting.

7. Explain different types of business organizations what are the differences between
proprietory and partnership business.

8.a) 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.
b) 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.

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 Set No.

Code No.220201
2
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
---

1. Explain various functions of Managerial Economist.

2. “The quantity demanded of any good appears to depend upon utility, price and
Income” – Elucidate?

3. In normal and formal economic theory we often assume profit maximization. In

reality, the firm do not maximize profit; in fact, they cannot” Comment.

4. What are the determinants of cost behaviour. Enumerate different approaches for
estimating cost functions.

5. 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%.

6. Explain various steps involved in Capital budgeting technique.

7. Explain various features and problems of public sector enterprises.

8. 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.
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 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
---
1. “Managerial Economics is economics applied in decision making”- Discuss.

2. Differenciate between derived demand and Autonomous demand and superior

goods and inferior goods.

3. How far is profit maximization the basic objective of a firm. What are the reasons
for limiting profits?

4. Distinguish between: (a) Explicit cost and Implicit cost (b) Actual cost and
opportunity cost (c) Fixed cost and semi-fixed cost.

5. 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

6. Explain the importance of operating cycle in estimating working capital needs.

7. Differentiate between partnership and Joint stock companies.

8. Explain the significance and utility of Ratio Analysis in financial decision

making.

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 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
---
1. Explain clearly the nature and scope of managerial economics.

2. Define total Revenue, Marginal revenue and average revenue.

3. How is the behavior of profit-maximizing firm different from that of revenue-

maximizing firm.

4. Discuss briefly the different cost concepts relevant to managerial decision of

planning and control.

5. 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

6. Explain different types of working capital.

7. Distinguish between perfect competition and Monopoly.

8. 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.
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