Weighted average is one means by which accountants calculate the costs of items. It is an important tool in accounting for stock fluctuations, uneven or misrepresented data and ensuring similar data points are equal in the proportion represented. Weighted averages are commonly used in statistical analysis, stock portfolios and teacher grading averages. What is weighted average?Ī weighted average is the average of a data set that recognizes certain numbers as more important than others. In this article, we explore how to calculate weighted average using two methods. The accuracy of the numbers you arrive at with this method is determined by the weight you give specific variables in the data set. A weighted average helps the user gather a more accurate look at a set of data than the normal average alone. The weighted average method is a tool used in classrooms, statistical analysis and accounting offices, among others.
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