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4.1 Simple and Weighted Averages – Fundamentals of Business Math
September 1, 2023 - This involves the direct comparison of only two numbers, and the determination of whether sales are up or down is very clear. In a simple average, all individual data share the same level of importance (weight) in determining the typical value.
Scribd
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CA - Unit 2 - Simple Average Method | PDF | Prices | Economies
The simple average method calculates the average price of materials by adding all prices paid and dividing by the total number of prices. It does not consider quantities purchased at each price.
Videos
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Asprova
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Simple Average Method - Inventory Control - MRP glossary of Production scheduler Asprova
It is a method for inventory valuation or delivery cost calculation, where even if accepting inventory goods with different unit cost, the average unit cost is calculated by multiplying the total of these unit costs simply by the number of receiving. The example of Simple Average Method is ...
Blogger
accountlearning.blogspot.com › 2010 › 05 › simple-average-method-its-advantages.html
Simple Average Method, Its Advantages And Disadvantages - Accounting-Finance
Concept Of Simple Average Method In simple average method, issue price of materials are fixed at average unit price. Simple average is an average of price without considering the quantities involved.
Svtuition
svtuition.org › 2010 › 08 › simple-average-method.html
Simple Average Method | Accounting Education University
In cost accounting, we can calculate the value of material issue on the basis of simple average price method. Under this method, we can calculate the total of unit cost of each purchase and then it is divided by total no. of units. Suppose, you have bought the material 1st time 500 units @ Rs.
Penn State World Campus
courses.worldcampus.psu.edu › welcome › mangt515 › lesson02_09.html
Simple Averages
In simple averages, the next period's forecast is the average of all previous actual values. In this case, the underlying assumption is that all history has a bearing on the most recent events. The fluctuations that are seen from period to period are assumed to be merely random events that ...
Top answer 1 of 2
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Simple Average Method
The simple average method is a statistical technique for calculating the mean of a set of numbers. It is also known as the arithmetic mean and is the most commonly used method for finding the central tendency of a set of data. In this method, we add up all the values in a set of data and divide the sum by the total number of values. This gives us the average value of the set of data.
For example, let's say we want to find the average score of a student in a class. We have the following scores: 80, 90, 70, 85, and 95. To find the average, we add up all the scores and divide the sum by the total number of scores:
(80 + 90 + 70 + 85 + 95) ÷ 5 = 84
Therefore, the average score of the student in the class is 84.
Weighted Average Method
The weighted average method is a statistical technique that takes into account the relative importance or weight of each value in a set of data when calculating the mean. This method is used when the values in a set of data are not equally important.
In this method, we multiply each value in the set of data by its corresponding weight, add up all the products, and divide the sum by the total weight of all the values.
For example, let's say we want to find the average score of a student in a class, but the midterm exam is worth 40% of the total grade and the final exam is worth 60%. We have the following scores:
Midterm exam score: 80, weight: 40%
Final exam score: 90, weight: 60%
To find the weighted average, we multiply each score by its corresponding weight and add up the products:
(80 × 0.40) + (90 × 0.60) = 84
Therefore, the weighted average score of the student in the class is 84.
Key Differences
- Simple average method is used when all values in a set of data are equally important, whereas weighted average method is used when the values in a set of data are not equally important.
- In simple average method, all values are given the same weight, whereas in weighted average method, each value is multiplied by its corresponding weight.
- Simple average method assigns equal importance to all values, whereas weighted average method assigns different weights to the values based on their importance.
The simple average method is a statistical technique for calculating the mean of a set of numbers. It is also known as the arithmetic mean and is the most commonly used method for finding the central tendency of a set of data. In this method, we add up all the values in a set of data and divide the sum by the total number of values. This gives us the average value of the set of data.
For example, let's say we want to find the average score of a student in a class. We have the following scores: 80, 90, 70, 85, and 95. To find the average, we add up all the scores and divide the sum by the total number of scores:
(80 + 90 + 70 + 85 + 95) ÷ 5 = 84
Therefore, the average score of the student in the class is 84.
Weighted Average Method
The weighted average method is a statistical technique that takes into account the relative importance or weight of each value in a set of data when calculating the mean. This method is used when the values in a set of data are not equally important.
In this method, we multiply each value in the set of data by its corresponding weight, add up all the products, and divide the sum by the total weight of all the values.
For example, let's say we want to find the average score of a student in a class, but the midterm exam is worth 40% of the total grade and the final exam is worth 60%. We have the following scores:
Midterm exam score: 80, weight: 40%
Final exam score: 90, weight: 60%
To find the weighted average, we multiply each score by its corresponding weight and add up the products:
(80 × 0.40) + (90 × 0.60) = 84
Therefore, the weighted average score of the student in the class is 84.
Key Differences
- Simple average method is used when all values in a set of data are equally important, whereas weighted average method is used when the values in a set of data are not equally important.
- In simple average method, all values are given the same weight, whereas in weighted average method, each value is multiplied by its corresponding weight.
- Simple average method assigns equal importance to all values, whereas weighted average method assigns different weights to the values based on their importance.
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In case of simple average no weight/frequency has been given/needed but in case of weighted average method frequency/weight is needed.
For example as below 3 students got marks (x)90,99,100 respectively ,now the simple average marks of these students is--(90+99+100)÷3=96.33.
and in another example where students got marks
(x) marks- 50 60 70
(f)frequency- 1. 2. 3. =6
(fx)multiplication-50+120+210=380
weight average mark is 380/6=63.33.
formula 1)sum of all x÷nn= number of students
formula 2)sum of all fx÷sum of all f.(for weighted average)
point to be noted here this frequency is used as weight ,in books weight may be used.
For example as below 3 students got marks (x)90,99,100 respectively ,now the simple average marks of these students is--(90+99+100)÷3=96.33.
and in another example where students got marks
(x) marks- 50 60 70
(f)frequency- 1. 2. 3. =6
(fx)multiplication-50+120+210=380
weight average mark is 380/6=63.33.
formula 1)sum of all x÷nn= number of students
formula 2)sum of all fx÷sum of all f.(for weighted average)
point to be noted here this frequency is used as weight ,in books weight may be used.