XL98: Calculating Weighted Averages

ID: Q192377

The information in this article applies to:

Microsoft Excel 98 Macintosh Edition

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:

In a new worksheet, enter the following data:
A1: Cost B1: Cases
A2: $.20 B2: 10
A3: $.30 B3: 40

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 : kbdta xlformula
Version : MACINTOSH:98
Platform : MACINTOSH
Issue type : kbhowto