Homework Answers
1) Price Index for each year can be calculated by the folllowing formula -
Price Index = Price of Pizza * Quantity of Pizza + Price of Soda * Quantity of Soda + Price of Latte * Quantity of Latte
The calculations are shown in the table below.
2) Between 2018 and 2019, inflation was of 38.3% and between 2020 and 2019, inflation was of 16.3%. We calculate inflation by taking the percentage change of price indices.
| Year | Price of Pizza (Pz) | Price of Soda (Ps) | Price of Caffe-Latte (Pz) | Quantity of Pizza (Qz) | Quantity of Soda (Qs) | Quantity of Caffe-Latte (Qz) | Price Index | Inflation |
| 2018 | 5 | 0.5 | 1.5 | 1 | 2 | 4 | 12 | |
| 2019 | 5.5 | 0.55 | 2.5 | 1 | 2 | 4 | 16.6 | 38.3% |
| 2020 | 6 | 0.65 | 3 | 1 | 2 | 4 | 19.3 | 16.3% |
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Calculate a price index for 2018, 2019, 2020 using the following information about prices. Let the...
1. Calculating Inflation using a simple price Index Consider a fictional price index, the College Student Price In...
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The following information relates to the Jimmy Johnson Company. Date Ending Inventory (End-of-Year Prices) Price Index...
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The following information relates to the Kevin Hall Company. Date Ending Inventory (End-of-Year Prices) Price Index...
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Dollar-Value LIFO Example Price Ending Inventory,. Date Index Current Prices 1.00 2018 $200,000 1.15 $299,000 2019 1.20 $300,000 2020 1.30 $351,000 2021 Steps in computing ending inventory: 1. Convert inventory to base year costs. 2. Identify the layers of ending inventory created each year. 3. Restate each layer using the cost index in the year acquired. EIBYC Price Ending Inventory Layers EICC Date EICC/Index Index 1.00 $200,000 2018 1.15 $299,000 2019 1.20 $300,000 2020 1.30 $351,000 2021 11 I Pags
The following information relates to the Steven Garcia Company. Ending Inventory Price Date (End-of-Year Prices) Index December 31, 2016 $68,900 100 December 31, 2017 115,712 128 December 31, 2018 125,386 142 December 31, 2019 139,722 146 December 31, 2020 131,121 153 Use the dollar-value LIFO method to compute the ending inventory for Garcia Company for 2016 through 2020. Ending Inventory 2016 2017 2018 $ $ $ 2019 to 2020 to
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