A large manufacturer purchases an identical component from three independent sup

Question

A large manufacturer purchases an identical component from three independent suppliers that differ in unit price and quantity supplied. The relevant data for 2007 and 2009 are given here. Compute the price relatives for each of the component suppliers separately. Compare the price increases by the suppliers over the two-year period. Compute an unweighted aggregate price index for the component pan in 2009. Compute a 2009 weighted aggregate price index for the component part. What is the interpretation of this index for the manufacturing firm? R&B; Beverages, Inc., provides a complete line of beer, wine, and soft drink products for distribution through retail outlets in central Iowa. Unit price data for 2006 and 2009 and quantities sold in eases for 2006 follow. Compute a weighted aggregate index for the R&B; Beverage sales in 2009, with 2006 as the base period. Under the last-in first-out (LIFO) inventory valuation method, a price index for inventory must be established for tax purposes. The quantity weights are based on year-ending inventory levels. Use the beginning-of-the-year price per unit as the base-period price and develop a weighted aggregate index for the total inventory value at the end of the year. What type of weighted aggregate price index must be developed for the LIFO inventory valuation?

Explanation / Answer

Answer:3

a.

Answer: 3 b

I2009=[(6.00+5.95+6.20)/(5.45+5.60+5.50)](100)=110

Answer:3 c

I2009=[(6.00*150+5.95*200+6.20*120)/(5.45*150+5.60*200+5.50*120)](100)=109

There is a 9% increase in prices over the two-year period.

Answer:4

I=182237500/1592500

=114.43

Item Price relatives A (6.00/5.45)(100)=110 B (5.95/5.60)(100)=106 C (6.20/5.50)(100)=113

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.