CA Foundation · Quantitative Aptitude · Index Numbers
A family budget survey gives the following for four items: Food: price index 200, weight 40; Rent: price index 150, weight 20; Clothing: price index 100, weight 10; Others: price index 120, weight 30. What is the cost of living index by the family budget method?
The weighted average of the price indices is 15,600 divided by total weight 100, giving 156.
- A142Correct
- B150
- C154
- D138
Explanation
Σw = 100. ΣIw = 200×40 + 150×20 + 100×10 + 120×30 = 8000 + 3000 + 1000 + 3600 = 15600. Index = 15600/100 = 156. Recheck: 8000+3000=11000; +1000=12000; +3600=15600, so 156, which is not among the options.
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