Question

Compute the index number for the year 2015 with the base year 2010 by the method of total expenditure using the following data:

item	A	B	C	D
price of year 2010	10	30	40	20
price of year 2015	14	42	80	26
quantity of year 2010	8	4	4	16

Answer 1

Here, base year is 2010 and current year is 2015.

∴ p₀ = Price in 2010;

q₀ = Quantity in 2010

and p₁ = Price in 2015

The table for calculation is prepared as follows:

Index number by total expenditure method

\(=\frac{\sum {p_1\,q_0}}{\sum {p_0\,q_0}}\times 100\)

\(=\frac{1016}{680}\times 100\)

= 149.41