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November 24, 2015 at 1:24 am
I really need your assistance with this question:
A production process uses 10 batches of Product A and 30 of product B each year. The costs are as follows:
Product A – 2011 $6.50, 2012 $6.90
Product B – 2011 $2.20, 2012 $2.50
Construct a price index using
(1) Quantity weights
(2) Value weights
Answer given for (1) A – 2011, 6.50 = 100, 690 = 106.20 x 10 = 1062
(2) B – 2012, 2.20 = 100, 250 = 113.64 x 30 = 3409
I’m not sure of how they arrived at the figures 106,20 and 113.64.
Grateful for your assistance
John Moffat says
November 24, 2015 at 7:58 am
You must ask this question in the Ask the Tutor Forum, and not as a comment on a lecture.
November 18, 2015 at 10:38 am
In lecture notes for the example 3 the quantities are different for each year (2008 sugar 15, 2009 sugar 18, 2010 sugar 20). In vdeo lectures, we took the same quantities each year (2008, 2009, 2010 sugar 15).
November 18, 2015 at 11:05 am
It is because we are calculating a price index and therefore we must use the same quantities for each of the two years.
Which quantities we use depends on whether we are calculating a Lapser price index or a Paasche price index.
I really do suggest that you watch the lectures again because this is explained.
November 8, 2015 at 11:51 pm
Just a quick question are the laspeyre and paasche price index provided in the exam?
November 9, 2015 at 7:28 am
If you mean are the formulae provided, then the answer is no.
(You and see the formula sheet provided in the exam near the front of our free Lecture Notes).
May 10, 2015 at 6:38 pm
hellos sir, I would like to know how old is this lectures has been
I hope it was recently uploaded ones
May 10, 2015 at 7:49 pm
I honestly cannot remember when the lecture was recorded. However I really do not why you are interested.
All our lectures are always relevant for the next exams. They are reviewed after every exam and if the syllabus changes then lectures are removed or re recorded or new lectures added.
Why do you hope that is was recently recorded??
May 2, 2014 at 11:34 am
Dear sir, I am not really understanding the logic of the answer to question b), why it’s 119/108.2 * 0.4$=0.44 ?
May 2, 2014 at 2:11 pm
The index numbers for 2007 and 2008 are telling you that for every $108.2 that was spent in 2007 we would have to spend $119 in 2008.
So…….if we actually spent $0.40 in 2007 it would cost in 2008: 119/108.2 x $0.40
(Another way you can look at it is this. Something that cost 108.2 in 2007 would have gone up by 10.80 in 2008 (119 – 108.2). This is an increase of 10.8/108.2 x 100 = 9.982%.
So….if something cost $0.40 in 2007, then add on 9.982% and you will get a cost of $0.44 in 2008)
May 2, 2014 at 2:54 pm
Got you. Thank you sir!
November 26, 2012 at 4:14 pm
he is a wonderful teacher
October 25, 2012 at 4:49 pm
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