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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer?
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Given below are the data on prices of some consumer goods and the weig...
Calculation of Price Index Number for the year 1985 (Base 1984 = 100)
Items Unit 1984 1985 Weight
Wheat Kg. 0.50 0.75 2
Milk Litre 0.60 0.75 5
Egg Dozen 2.00 2.40 4
Sugar Kg. 1.80 2.10 8
Shoes Pair 8.00 10.00 1
Step 1: Calculation of Price Relative
Price Relative = (Price in 1985 / Price in 1984) x 100
Wheat Price Relative = (0.75 / 0.50) x 100 = 150
Milk Price Relative = (0.75 / 0.60) x 100 = 125
Egg Price Relative = (2.40 / 2.00) x 100 = 120
Sugar Price Relative = (2.10 / 1.80) x 100 = 116.67
Shoes Price Relative = (10.00 / 8.00) x 100 = 125
Step 2: Calculation of Weighted Average of Price Relative
Weighted Average of Price Relative = (Price Relative x Weight) / Total Weight
Wheat Weighted Price Relative = (150 x 2) / 20 = 15
Milk Weighted Price Relative = (125 x 5) / 20 = 31.25
Egg Weighted Price Relative = (120 x 4) / 20 = 24
Sugar Weighted Price Relative = (116.67 x 8) / 20 = 46.67
Shoes Weighted Price Relative = (125 x 1) / 20 = 6.25
Total Weighted Price Relative = 15 + 31.25 + 24 + 46.67 + 6.25 = 123.17
Step 3: Calculation of Price Index Number
Price Index Number = (Total Weighted Price Relative / Base Year Weighted Price Relative) x 100
Base Year Weighted Price Relative = (100 x Total Weight) / Total Weight = (100 x 20) / 20 = 100
Price Index Number = (123.17 / 100) x 100 = 123.17
Hence, the price index number for the year 1985 (Base 1984 = 100) is 123.17. Therefore, Option (b) 123.3 is incorrect.
Items Unit 1984 1985 Weight
Wheat Kg. 0.50 0.75 2
Milk Litre 0.60 0.75 5
Egg Dozen 2.00 2.40 4
Sugar Kg. 1.80 2.10 8
Shoes Pair 8.00 10.00 1
Step 1: Calculation of Price Relative
Price Relative = (Price in 1985 / Price in 1984) x 100
Wheat Price Relative = (0.75 / 0.50) x 100 = 150
Milk Price Relative = (0.75 / 0.60) x 100 = 125
Egg Price Relative = (2.40 / 2.00) x 100 = 120
Sugar Price Relative = (2.10 / 1.80) x 100 = 116.67
Shoes Price Relative = (10.00 / 8.00) x 100 = 125
Step 2: Calculation of Weighted Average of Price Relative
Weighted Average of Price Relative = (Price Relative x Weight) / Total Weight
Wheat Weighted Price Relative = (150 x 2) / 20 = 15
Milk Weighted Price Relative = (125 x 5) / 20 = 31.25
Egg Weighted Price Relative = (120 x 4) / 20 = 24
Sugar Weighted Price Relative = (116.67 x 8) / 20 = 46.67
Shoes Weighted Price Relative = (125 x 1) / 20 = 6.25
Total Weighted Price Relative = 15 + 31.25 + 24 + 46.67 + 6.25 = 123.17
Step 3: Calculation of Price Index Number
Price Index Number = (Total Weighted Price Relative / Base Year Weighted Price Relative) x 100
Base Year Weighted Price Relative = (100 x Total Weight) / Total Weight = (100 x 20) / 20 = 100
Price Index Number = (123.17 / 100) x 100 = 123.17
Hence, the price index number for the year 1985 (Base 1984 = 100) is 123.17. Therefore, Option (b) 123.3 is incorrect.
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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer?
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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer?.
Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1 Then weighted average of price Relative Index is : (a) 125.43 (b) 123.3 (c) 124.53 (d) 124.52 (b) 123.3 is Correct Answer?.
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