Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Paasche quantity

- This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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- December 5, 2022 at 7:24 pm #673547
Hi good evening,

Appreciate your help with the below. I am following all the steps and still not matching with the answer (the book uses the formula so cannot match my workings)

A company buys and uses five different materials. Details of the prices and quantities used for 20X1 (base year) and 20X2 (current year) are as follows;

20X1

MATERIAL QUANTITY UNIT PRICE

F 21000 11

G 56000 22

H 62000 18

I 29000 20

J 31000 2220X2

MATERIAL QUANTITY UNIT PRICE

F 25000 12

G 52000 26

H 79000 18

I 35000 22

J 36000 23What is the Paasche quantity index for these products?

—————————————————————————————————————–The material indexes I managed to work out are below, am I correct till this step?

MATERIAL INDEX

F 119.05

G 92.87

H 127.42

I 120.69

J 116.13The next step is to then multiply the indexes by the sales of 2012 (or the unit price?) and divide by the total sales (or unit prices?).

I am varying from the answer..

No matter in what way I attempt it I cannot find what I am doing wrong 🙁

Thanks,

SaraDecember 6, 2022 at 8:33 am #673611Instead of calculating an index number for each material separately, what you need to do is calculated the cost of the total using the X2 quantities at the X2 prices, and divide by the cost of the total using the X1 quantities at the X2 prices.

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