Knowledge Base

XL98: Calculating Weighted Averages

Article ID: 192377

Article Last Modified on 9/11/2002

APPLIES TO

This article was previously published under Q192377

SUMMARY

A weighted average differs from an average in that a weighted average returns a number that depends both on its value and its weight.

Consider the following example:

A shipment of 10 cases of widgets costs $0.20 per case.

Due to heavy consumption of widgets, a second shipment of 40 cases now costs $0.30 per case.

The average cost of the cases in each shipment, ($0.20+$0.30)/2 = $0.25, would not be an accurate measure of the average cost of the cases, since it does not take into account that there are thirty more cases being purchased at $0.30 than at $0.20. The weighted average would return $0.28, a more accurate representation of the average cost of a case of widgets.

MORE INFORMATION

To find a weighted average, follow these steps:
  1. In a new worksheet, enter the following data:

    A1: Cost B1: Cases
    A2: $.20 B2: 10
    A3: $.30 B3: 40

  2. Enter the formula below in any blank cell. It is not necessary to enter this formula as an array.

    =SUMPRODUCT(A2:A3,B2:B3)/SUM(B2:B3)


Additional query words: XL98

Keywords: kbhowto KB192377


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