As of 12/31/17, Steve Harrington, Inc. has ending inventory with 500 units of Item A and 1,500 units of Item B. The company made the following (most recent) purchases during 2017:

Item A has a base-year price of $8 per unit, and Item B has a base-year price of $4 per unit. What is Steve Harrington's price index for 2017? You may round your answer to the nearest two digits (e.g., 1.40).

Transcribed Image Text:

Item Purchase Date Quantity Purchased Cost per Unit A $9 $10 $5 A B 12/22/17 12/29/17 12/18/17 300 400 2,100 Item Purchase Date Quantity Purchased Cost per Unit A $9 $10 $5 A B 12/22/17 12/29/17 12/18/17 300 400 2,100

Answer rating: 100% (QA)

To calculate the price index for 2017 we can use the Laspeyres Price Index formula which compares th... View the full answer