Difference between Normal

and Weighted Average

In the below example, we have 1658 as a normal average
and 1445 as a weighted average. Let me clarify above
calculation in two points.

• If you multiply 1658 with 68 you will get 112742 and if

you multiply 1445 with 68 you will get 98289 which
equals to the total amount.
• Product-1 has the lowest price and highest quantity
whereas Product-4 has the highest price and lowest
quantity.
1. While calculating normal average you are not
considering quantity and if there is a change in
quantity there will be no effect on the average
price.
2. And, in weighted average, you can take quantity as
a weight.
Now, let's learn the steps to calculate the weighted
average with sumproduct.
Difference between Normal
and Weighted Average
To calculate weighted average we are using the same data
table which I have shown you in the above example. You
can download it from here to follow along.

Just follow these two simple steps.

• In the C7 cell, enter following formula.

• =SUMPRODUCT(B2:B6,C2:C6)/SUM(B2:B6)

• Click OK.
Now, we have 1445 as a weighted average of price and
product.

As I said, sumproduct is an easy way to calculate the

weighted average or weighted mean in excel. And the best
part is it will do all the calculation in a simple cell.

How Does This Formula Works?

Let me break down the entire formula for your better
understanding.

1. In the first part, sumproduct will calculate the product of price

and quantity for the all the products return the sum of all
those.
2. In the second part, sum function will give you the sum of
quantity.
3. And, in the end, you will get the weighted average
by dividing values from both of the function.