Financial Performance - index numbers

angi13 Registered Posts: 24 New contributor 🐸
Hello, I need some help to understand on how to use index numbers please.

Basically I am trying to resolve and understand the below example:

The cost per unit of a product has increased from £72 in January to £80 in April. The cost per unit was £70 when the index was rebased to 100.

Now just need to calculate what was the cost index in April and the increase from January to April (%)

Thank you very much in advance.


  • Cudey
    Cudey Registered Posts: 138 Dedicated contributor 🦉
    Hi Angi13

    I'm having one of those days, so this may not be totally correct, but I have a saying of "Actual over Base times Base" stuck in my head.

    So the new cost index = £80 (April's cost) / £70 (The original base cost) * 100 (Base index) = 114.2857

    The price increase is £80 (Actual) / £72 (Base cost) * 100 = 111.11 = Which equates to 11%

    Hope that's right and helps!
  • angi13
    angi13 Registered Posts: 24 New contributor 🐸
    Hi Cudey,

    Thank you so much for your help with this question.

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