1. State the problem. This month's commodity index decreased by one-quarter of last month's index to 60. 2. Let the variable. Let last month's index be $x$. 3. Model the change. A decrease of one-quarter of $x$ means the new index is $x-\frac{1}{4}x = \frac{3}{4}x$. 4. Form the equation. Set the new index equal to 60, so $$\frac{3}{4}x = 60$$. 5. Solve for $x$. Multiply both sides by $\frac{4}{3}$ to isolate $x$. $$x = 60\cdot\frac{4}{3}$$ Show cancellation of common factors by factoring 60 as $3\cdot 20$ and canceling the 3. $$x = \frac{(\cancel{3}\cdot 20)\cdot 4}{\cancel{3}}$$ After canceling the 3 we simplify. $$x = 20\cdot 4$$ $$x = 80$$ 6. Final answer. Last month's commodity index was $80$.