How to calculate weighted averages in Excel 2000 (214049)
The information in this article applies to:
This article was previously published under Q214049
For a Microsoft Excel 97 version of this article, see 109211.
For a Microsoft Excel 98 version of this article, see 192377.
SUMMARY
A weighted average differs from an average in that a weighted average returns a number that depends on the variables of both value and weight.
Consider the following example:
A shipment of 10 cases of widgets costs $0.20 per case. Because of 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 -- determined by the formula ($0.20+$0.30)/2 = $0.25 -- is not an accurate measure of the average cost of the cases because it does not take into account that there are 30 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 in these two shipments.
Modification Type: | Minor | Last Reviewed: | 9/9/2004 |
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Keywords: | kbformula kbhowto kbinfo KB214049 |
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