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    Betts Electronics

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    ** Please see the attached problems on calculating the price index. **

    Please answer in Excel.

    Problem 1

    Below is information on food items for the years 2000 and 2004.

    2000 2004
    Item Price Quantity Price Quantity
    Margarine (pound) $0.81 18 $0.89 27
    Shortening (pound) 0.84 5 0.94 9
    Milk (1/2 gallon) 1.44 70 1.43 65
    Potato chips 2.91 27 3.07 33

    a. Compute a simple price index for each of the four items. Use 2000 as the base period.
    b. Compute a simple aggregate price index. Use 2000 as the base period.

    Problem 2

    Betts Electronics purchases three replacement parts for robotic machines used in their manufacturing
    process. Information on the price of the replacement parts and the quantity purchased
    is given below.

    Price Quantity
    Part 2000 2004 2000 2004
    RC-33 $0.50 $0.60 320 340
    SM-14 1.2 0.9 110 130
    WC50 0.85 1.00 230 250

    a. Compute a simple price index for each of the three items. Use 2000 as the base period.
    b. Compute a simple aggregate price index for 2004. Use 2000 as the base period.

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    https://brainmass.com/business/profitability-index/230860

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    Problem 1

    Below is information on food items for the years 2000 and 2004.

    2000 2004
    Item Price Quantity Price Quantity
    Margarine (pound) $0.81 18 $0.89 27
    Shortening (pound) 0.84 5 0.94 9
    Milk (1/2 gallon) 1.44 70 1.43 65
    Potato chips 2.91 27 3.07 33
    $6.00 $6.33

    a. Compute a simple price index for each of ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer

    $2.19

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