Page 502 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 502
Chapter 18
Example 8
The average prices of four commodities, along with the number of units used
annually by a company, are given in the following table:
Year 1 Year 2
Commodity Price per Price per Quantity
unit unit
$ $ Units
A 10 11 10
B 20 24 1
C 50 52 5
D 100 105 4
Calculate a weighted price index for year 2 based on year 1 using the
quantities given as weights.
Price index Quantity weighting Total Price index × Quantity
A 11/10 × 100 = 110 10 1,100
B 24/20 × 100 = 120 1 120
C 52/50 × 100 = 104 5 520
D 105/100 × 100 = 105 4 420
20 2,160
Weighted price index = 2,160/20 = 108
494
