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how to calculate weighted average gross profit percentage. The weighted average is calculated as the sum of all of the values multiplied by their weights divided by the sum of all of the weights. Weighted Avg 10 5 20 10 30 15 40 20 0005 002 0045 008 15.
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The profit equation is. The following example will demonstrate how to use Excels SUMPRODUCT and SUM functions to calculate a weighted average. The Excel sheet available for download below helps a business calculate the weighted average gross margin by entering gross margins and revenue for up to ten product lines.
1000000 Sales - 125000 Overhead 250000 Direct materials 75000 Direct labor 1000000 Sales.
To calculate the weighted average gross margin for the business it is necessary to weight each product gross margin by its corresponding revenue. How to Calculate Weighted Average in 3 Steps with Example 1. Profit revenue - costs so an alternative margin formula is. This results in a gross margin percentage of 55 which is calculated as.
