Article ID: 214049 - View products that 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
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.
To find a weighted average, follow these steps:
Article ID: 214049 - Last Review: September 18, 2011 - Revision: 6.0