Question

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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  • CreatedSeptember 20, 2015
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