AAT sample assessment 1, task 1, Question E - Indicies

absco14

I'm usually fine with indexing i'm not sure what's got my stumped on this question (i've looked at the answer but cant work backwards)
If someone could tell me how to get to it, id really appreciate it.

N4T

Hi,

I will just work out the Yr2 and Yr3 forecast, as 4 and 5 will follow the same pattern.

The 1st row should be straight forward. Forecasting at year 1 prices, hence just look at the increase based in sales volume based on Yr1 sales volume. (Yr1 is base year)

F/C Yr2. (148/140) x £384,000 = £405,943
F/C Yr3 (152.6/140) x £384,000 = £418,560

The forecast at expected prices. This is affected by both the change in sales price index and sales volume index.

F/C Yr2 (115/112) x (148/140) x £384,000 = £416,816
F/C Yr3 (120/112) x (152.6/140) x £384,000 = £448,457

I am not 100% certain re, row 2 of this question but looking at it logically there isn't any other way I can approach it. Fingers crossed, let me know if I've got them wrong.

absco14

Thank you very much! Your first workings answer row 1 and your second workings is the answer to row 2.
Makes alot more sense now