A 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. (Round your answers to the nearest integer.)

	Cost per Pound ($)
Ingredient	Beginning	Ending	Quantity (pounds) per 100 Pounds of Product
A	2.50	3.45	25
B	8.75	9.90	10
C	0.99	0.90	60

(a)

Compute the price relatives for the three ingredients.

Item	Price Relative
A
B
C

(b)

Compute a weighted average of the price relatives to develop a one-year cost index for raw materials used in the product.

I =

What is your interpretation of this index value?

Cost of raw materials is up % for the chemical.

1. DETAILS PREVIOUS ANSWERS MY NOT A 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. (Round your answers to the nearest integer.) Cost per Pound ($) Ingredient Beginning Ending Quantity (pounds) per 100 Pounds of Product A 2.50 3.45 25 B 8.75 9.90 10 C 0.99 0.90 60 (a) Compute the price relatives for the three ingredients. Item Price Relative A 138 B 113.14 95.96 x (b) Compute a weighted average of the price relatives to develop a one-year cost index for raw materials used in the product. I = What is your interpretation of this index value? Cost of raw materials is up % for the chemical