Indexes stuck again
topcat
Trusted RegularRegistered Posts: 452
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
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
0
Comments

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 = 2630 
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 :)0 