mercoledì 1 febbraio 2012

WEIGHTED AVERAGE with EXCEL, is calculated as - How to calculate the weighted average with EXCEL

WEIGHTED AVERAGE with EXCEL, is calculated as

How to calculate the weighted average with EXCEL.

With EXCEL is very easy to calculate the weighted average of a range of prices for a range of quantities.

example:

1) We are given a table where different prices for a quantity of materials, so the first thing we have to multiply all the prices for all quantities (yellow boxes for green boxes), then we copy the formula down to make all the calculations.

2) At the bottom of the column we are the sum of the costs with the SUM function.


3) Under the column of quantity, but we do directly to the sum of all quantities.


4) In the brown do a simple division between the total cost (price x quantity) divided by the total amount.


In this way we obtained the weighted average (5.72).

I mean is the weighted average price to quantity, or rather how much it costs on average a single piece.

This result is very different from a simple average price that does not take into account the quantity, that fact alone would result in the average price (6.09).