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# Date-15.10.

2020
AHSANULLAH UNIVERSITY OF SCIENCE AND TECHNOLOGY
Department of Arts and Sciences
Program: B.Sc. in Computer Science and Engineering

## Year: 3rd Course No: HUM3115

Semester: 1st Course Name: Economics and Accounting

Instructions: i) Answer script should be hand written and should be written in A4 white
paper.
You must submit the hard copy of this answer script to the Department
when the university reopens.
ii) Write down Student ID, Course number, and put your signature at the top
of every single page of the answer script
iii) Write down page number at the bottom of every page of the answer script.
iv) Upload the scan copy of your answer script in PDF format at the
respective site of the course at google classroom using institutional email
within the allocated time. Uploading clear and readable scan copy is your
responsibility and must be covered the full page of your answer script.
v) You must avoid plagiarism, maintain academic integrity, and ethics.
You are not allowed to take any help from another individual and if taken
so can result in stern disciplinary actions from the university authority
vi) Marks allotted are indicated in the right margin
vii) Necessary charts/tables are attached at the end of the question paper
viii) Assume any reasonable data if needed
ix) Symbols and characters have their usual meaning
Part-A (Economics)
Time: 2 (Two) hours Full marks: 40
Use a separate answer script for each section

## Instructions: i) Before uploading rename the PDF file as

CourseNo_StudentID_PartNo_SectionNo
e.g. Math2207_180107001_partA_section1.pdf
ii) There are3 (Three) Questions, Answer any 2 (Two).

## Question 1. [Marks: 13]

a) Calculate using the formula to measure price elasticity of demand at any point on a [7]
straight line demand curve. Explain graphically.
b) Illustrate the following table and calculate elasticity of demand if you move from [6]
point A to C and explain what you understand from the result.

POINT Px Qy

A 1500 150

B 1600 180

C 1700 210

## Question 2.[Marks: 13]

a) Explain the assumptions of a perfectly competitive market. [7]

b) Calculate profit maximizing level of output and maximum profit From the following [6]
revenue and cost functions,

## Question 3. [Marks: 13]

a) Illustrate when- [8]

A manufacturer has a fixed cost of \$40,000 and a variable cost of \$1.60per unit made
and sold. Selling price is \$2 per unit.

i) Find the revenue, cost and profit functions using q for the number
of units.

## iii) Find the break-even quantity.

Calculate the break-even chart. Label the cost and revenue lines, the fixed cost line,
and the break-even point.
b) Define fixed cost and variable cost. [5]

## Instructions: i) Before uploading rename the PDF file as

CourseNo_StudentID_PartNo_SectionNo
e.g. Math2207_180107001_partA_section2.pdf
ii) There are3 (Three) Questions, Answer any 2 (Two)

Question 4. [Marks: 7]

## a) Differentiate between Transaction and Event [3]

b) Show the effect of the following transactions on the accounting equation of Shadid Co. Ltd. in a [4]
tabular form for the month of June 2015.
June 1: Shareholders purchased 15,000 shares of each Tk. 10 paying cash in full.
June 2: Paid Tk. 20,000 for preliminary expense
June 3: Purchased office equipment for Tk. 20,000 and issued a note for the same amount.
June 7: Declared and paid a dividend of Tk. 5,000
June 15: Create provision for Tax 5% on EBT. (Earnings Before Tax Tk. 1,20,000)
June 20: Paid rent Tk. 24,000 covering next three months.
June 25: Paid legal fees Tk. 2000.
June 30: Proposed Dividend 15%

Question 5. [Marks: 7]
a) “The terms debit and credit mean increase and decrease, respectively.” Do you agree? [2]
Explain.
b) Journalize the following transactions in book of Raz Co. Ltd. [5]
Aug-1: Raz invested Tk. 50,000 and Equipment Tk. 30,000 in his business.
Aug-3: Owner withdrew tk. 2000 cash from the business to pay personal expenses.
Aug-15: Loan taken from Habib Bank Ltd. of Rs. 25,000. Rs. 20,000 withdrawn for business and
remaining in the bank a/c.
Aug-18: Purchased from Kareem goods of list price of Rs. 6,000, terms 2/10, net 30.
Aug-21: Bad Debts during the period was Rs.100 and Allowance for new bad debt is 10% on
Accounts Receivables (Accounts Receivables Tk. 1,00,000)
Aug-23: Placed Advertisement in The Dawn of Rs. 165, payment to be made within 30 days.
Aug-26: Sent check to The Dawn in payment of the liability incurred on August 20.
Aug-28: Paid Kareem the amount owed.
Aug-30: Product lost by fire of worth Rs. 500

Question 6. [Marks: 7]
a) “Why Contributions from owner’s in business are considered as a liability for the firms?” [2]
Explain with relevant accounting assumptions.
b) Prepare a trial balance with the following accounting items. [5]

Drawings 74,800; Purchases 295,700; Stock (31.12.2018) 30,000; Bills receivables 52,500; Capital
250,000; Furniture 33,000; Discount allowed 950; Sales 335,350; Rent 72,500; Sales return and
allowances 3,000; Freight 3,500; Printing charges 1,500; Sundry creditors 75,000; Mortgage
100,000; Insurance 2,700; Sundry expenses 21,000; Supplies (31.12.2019) 5,000; Discount received
1,000; Bank loan 120,000; Stock (31.12.2019) 17,000; Income tax 9,500; Machinery 215,400; Bills
payable 31,700; 12% Investment (1.09.2019) 8,000; Sales discounts 2,000; Supplies (01.01.2019)
3,500.
Part-B (Open book exam)
Submission deadline: Next day 6.30 pm Full marks: 20
Use a separate answer script for each sections

SECTION-1 (Economics)
(Full marks: 13)

## Instructions: i) Before uploading rename the PDF file as

CourseNo_StudentID_PartNo_SectionNo
e.g. Math2207_180107001_partB_section1.pdf
ii) Answer all the Questions

## Question 1. [Marks: 13]

a) Explain your understanding about localization of industries. What are the [7]
main causes of localization of industries? Explain them in brief.
b) Explain the advantages and disadvantages of localization of industries. [6]

## Instructions: i) Before uploading rename the PDF file as

CourseNo_StudentID_PartNo_SectionNo
e.g. Math2207_180107001_partB_section2.pdf
ii) Answer all the Questions

Question 1. [Marks: 7]
Based in Italy, Datura, Ltd., is an international importer-exporter of pottery with distribution centers in the
United States, Europe, and Australia. The company was very successful in its early years, but its [7]
profitability has since declined. As a member of a management team selected to gather information for
Datura’s next strategic planning meeting, you have been asked to review its most recent contribution
margin income statement for the year ended December 31, 2010, which appears below.
Datura, Ltd.
Contribution Margin Income Statement
For the Year Ended December 31, 2010
Particulars Amount Amount
Sales revenue €13,500,000
Less variable costs
Purchases 6,000,000
Distribution 2,115,000
Sales commissions 1,410,000
Total variable costs 9,525,000

## Contribution margin € 3,975,000

Less fixed costs
Distribution 985,000
Selling 1,184,000
General and administrative 871,875
Total fixed costs 3,040,875
Operating income € 934,125

## In 2010, Datura sold 15,000 sets of pottery.

1. For each set of pottery sold in 2010, calculate the (a) selling price, (b) variable purchases cost, (c)
variable distribution cost, (d) variable sales commission, and (e) contribution margin.
2. Calculate the breakeven point in units and in sales euros.
3. Historically, Datura’s variable costs have been about 60 percent of sales. What was the ratio of variable
costs to sales in 2010? List three actions Datura could take to correct the difference.
4. How would fixed costs have been affected if Datura had sold only 14,000 sets of pottery in 2010?