1. What is Weighted Cost?

Weighted cost is an average where some values contribute more than others based on assigned weights. It provides a more accurate measure than a simple average when values have different levels of importance.

2. How Does the Calculator Work?

The calculator uses the weighted cost formula:

Where:

• \( Value_i \) — Individual value in dollars
• \( Weight_i \) — Weight assigned to each value (dimensionless)
• \( \sum \) — Sum of all items

Explanation: Each value is multiplied by its corresponding weight, these products are summed, and then divided by the sum of all weights.

3. Importance of Weighted Cost

Details: Weighted cost is crucial in financial analysis, inventory management, and any situation where different items have different levels of importance or relevance.

4. Using the Calculator

Tips: Enter values in dollars separated by commas in the first field, and corresponding weights (as numbers without units) in the second field. Both fields must have the same number of items.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between weighted and simple average?
A: Simple average treats all values equally, while weighted average gives more importance to values with higher weights.

Q2: Can weights be zero or negative?
A: Weights should generally be positive numbers. Zero weight means the value doesn't contribute, and negative weights would invert the contribution.

Q3: What if the sum of weights is zero?
A: The calculation becomes undefined (division by zero). Ensure at least one weight is positive.

Q4: How are weights determined?
A: Weights depend on context - they could be quantities, importance factors, or other relevant measures.

Q5: Can I use this for non-financial calculations?
A: Yes, the weighted average concept applies to any numerical values where weighting is appropriate.