Indexes stuck again

topcat

Doesn't take me long to reach another road block does it :P

No idea at all how you work out the index to this even after reading the index chapter in the book

Any wizzardy on this is appreciated please A company has provided the following information:



January
February
March



Total cost
£64,500
£71,500
£92,050



Total quantity purchased
5,000kg
5,500kg
7,000kg



Price Index

260





Complete the table by inserting the price index figures for January and March,
rounded to the nearest whole numbers if necessary.

Thank you

SandyHood

The most important point to master is that the PRICE index is an index of the price per kg not the cost of all the kilograms purchased that month


January
February
March


Total cost
£64,500
£71,500
£92,050


Total quantity purchased
5,000 kg
5,500 kg
7,000 kg


Price per kg
£12.90 per kg
£13.00 per kg
£13.15 per kg


Price Index
258
260
263


I'm taking it for granted that you know how to calculate the price per kg
Now that we know that £13.00 per kg has an index of 260 we can divide the index by the price. This gives us the multiple to convert a price to an index.
The multiple here is 260/£13.00 = 20 per £1
The price index for January is £12.90 x 20 = 258
The price index for March is £13.15 x 20 = 263

SamiH

http://forums.aat.org.uk/forum/for-student-members/student-discussion/technician-diploma/35571-base-index-question-for-financial-performance

topcat

SandyHood wrote: »

The most important point to master is that the PRICE index is an index of the price per kg not the cost of all the kilograms purchased that month


January
February
March


Total cost
£64,500
£71,500
£92,050


Total quantity purchased
5,000 kg
5,500 kg
7,000 kg


Price per kg
£12.90 per kg
£13.00 per kg
£13.15 per kg


Price Index
258
260
263


I'm taking it for granted that you know how to calculate the price per kg
Now that we know that £13.00 per kg has an index of 260 we can divide the index by the price. This gives us the multiple to convert a price to an index.
The multiple here is 260/£13.00 = 20 per £1
The price index for January is £12.90 x 20 = 258
The price index for March is £13.15 x 20 = 263

thank you great explanation :-)

topcat

SamiH wrote: »

http://forums.aat.org.uk/forum/for-student-members/student-discussion/technician-diploma/35571-base-index-question-for-financial-performance

thank for link also