FORMULA OF WEIGHTED AVERAGE MEAN

Weighted Average = (x1 w1 + x2 w2. .+ xn wn) / (w1 +

w2. . + wn) = i = 1 to n (xi wi) / i = 1 to n wi THROUGH EXCEL SHEET Weighted Average = SUMPRODUCT (A2:A15, B2:B15) / SUM (B2:B15)

A weighted average is an average that adjusts for the frequency of individual values. Here's an example of a weighted average: suppose 20 people are asked to estimate the number of goats Farmer Jones has. One says 4; seven, 5; eleven, 6; and one, 30. To find the weighted average, multiply each value (ie, number of goats) by the number of people who made that estimate, add up the results, and then divide by the number of people. Thus the weighted average is [(1x4)+(7x5)+(11x6)+(1x30)]/(20)= 6.75. In a weighted average, values that are unusual have relatively little effect. In the example, the weighted average was raised relatively little by a very high estimate of 30 goats, because only one person made that guess

How Weighted average mean helpful to manager

For finding average selling price
Investing & Forecasting Earning estimate analysis For example cost of capital:

For finding weighted average selling price

Product name Selling Price Per Product $ 56.00 $ 66.00 $ 60.00 $ 58.00 x x x x Sales % Forecast Adjusted Factor

Levi Jeans Edwin Jeans Guess Jeans Ikeda Jeans

50% 25% 15% 10%

= = = =

28.00 16.50 9.00 5.80 $ 59.30

Weighted Average Selling Price for Jeans

Cost of capital DEBT=60%,EQUITY=40%,Rd=5%,Re=10%,TAX

RATE=35% WACC=D/V(RD)(1-TC) +E/V(Re) WACC=60%(5%) (1-35%) + 40%(10%) WACC=5.95%

Example:

Grades are often computed using a weighted average. Suppose that homework counts 10%, quizzes 20%, and tests 70%. If Pat has a homework grade of 92, a quiz grade of 68, and a test grade of 81, then Pat's overall grade = (0.10)(92) + (0.20)(68) + (0.70)(81) = 79.5

 http://www.youtube.com/watch?v=JKJglPkAJ5o