Pattern of overall cost changes

Reference no: EM13990243

Consider the following cost index series for school equipment supplied by the Limpopo Province Education Department to schools in the province.

	2003	2004	2005	2006	2007	2008	2009	2010
Composite cost index	94.8	97.6	100	105.2	108.5	113.9	116.7	121.1

(a) Change the base year index from 2005 to 2008. Show the revised composite cost index series for school equipment.

(b) Interpret the pattern of overall cost changes in school equipment provided by the Limpopo Province Education Department.

(c) Use the original cost index series and calculate link relatives to identify year-on- year cost changes. Interpret the link relatives index series.

(d) If the department budgeted R5 million in 2003 for school equipment for the province's schools, what should the budgets have been in each year from 2004 to 2010 to provide at least the same level of service to schools?

(e) Excel task: Plot the revised composite cost index series from (a) on a line graph using the Line with Markers option in the Insert > Chart tab in Excel.

Reference no: EM13990243

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