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17.2
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17.3
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17.4
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17.5 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?...
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17.6 Price relatives for three items, along with base-period prices and usage are shown in the following table. Compute a weighted aggregate price index for the current period....
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17.7 The Mitchell Chemical Company produces a special industrial chemical that is a blend of three chemical ingredients. The beginning-year cost per pound, the ending-year cost per pound, and the blend proportions follow....
a. Compute the price relatives for the three ingredients.
b. Compute a weighted average of the price relatives to develop a one-year cost index for raw materials used in the product. What is your interpretation of this index value?
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17.8 An investment portfolio consists of four stocks. The purchase price, current price, and number of shares are reported in the following table....Construct a weighted average of price relatives as an index of the performance of the portfolio to date. Interpret this price index.
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17.9 Compute the price relatives for the R&B Beverages products in exercise 4. Use a weighted average of price relatives to show that this method provides the same index as the weighted aggregate method.
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17.10
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17.11 Average hourly wages for workers in service industries for the four years from 2002 through 2005 are reported here. Use the Consumer Price Index information provided to deflate the wages series. Calculate the percentage increase or decrease in real wages and salaries from 2003 to 2005....
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17.12
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17.13
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17.14
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17.15
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17.16
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17.17
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17.18
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17.19
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17.20
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17.21
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17.22
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17.23
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17.24 Starting faculty salaries (nine-month basis) for assistant professors of business administration at a major Midwestern university follow. Use the CPI to deflate the salary data to constant dollars. Comment on the trend in salaries in higher education as indicated by these data....
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17.25
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17.26
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