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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Multi item index number
Hello sir
I hope this massage finds you well
Question : The managers of the catering division of a hospital wish to develop an index number series for measuring changes in food prices. As an experiment, they have chosen four items in general use which are summarised below
2001 price per unit
Flour 0.25$ – egg 1$ – milk 0.3$ – potatoes 0.05$
2002 price per unit
Flour 0.03$ – egg 1.25$ – milk 0.35$ – potatoes 0.06$
2001 quantities
Flour 8000 kg – egg 4000 box – milk 10000 liter – potatoes 6000 kg
2002 quantities
Flour 10000 kg – egg 5000 box – milk 10000 liter – potatoes 10000 kg
Calculate a weighted price index for 20X2 for these four products (with 20X1 as the base year) using the 20X1 sales quantities as weights.
A. 118.3
B. 119.6
C. 119.9
D. 129.9
Sir in this is question I took the 2001 shopping basket( quantities ) and I calculate how much this shop basket cost for us in 2001 and 2002 prices
Which in 2001 shopping basket cost us 9300 in 2001 prices
And 2001 shopping basket cost us 11260 on 2002 prices
Then 11260/9300 x 100 = 121
Could you please tell me sir which part of my calculation is wrong
Thank you
On the assumption that you have mistyped the 2002 price of eggs (and that it should be 0.3 and not 0.03) then your calculations appear to be correct.
