---
title: "Weighted Average"
slug: "weighted-average"
description: "Understand how weighted average costing calculates per-unit cost in the Above-Store AvT report."
updated: 2024-07-08T05:42:20Z
published: 2024-07-08T05:42:20Z
canonical: "docs.restaurant365.com/weighted-average"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Weighted Average

The Weighted Average is an optional Costing Method that can be chosen on the [Above-Store Actual vs Theoretical Analysis](/doc/docs/above-store-actual-vs-theoretical-analysis) report and is a more advanced Costing Method used for calculating [Inventory Costs](/doc/docs/purchased-item-record-cost-update-method) due to the fact that it considers quantity at the time the cost is recorded.

To understand **Weighted Average** better, let's take a look at the example below. This example lists the count details for a period, which spans the month of February, and begins with 3 cases of potatoes at $16.00/case from January's Ending Inventory Count.

    

| **Date** | **Units** | **Price Per Unit** | **Total Value** | **Description** |
| --- | --- | --- | --- | --- |
| January 31 | **3** | **$16.00** | $48.00 | Beginning Inventory |
| February 2 | **10** | **$20.00** | $200.00 | Purchased |
| February 9 | **10** | **$18.00** | $180.00 | Purchased |
| February 16 | **10** | **$22.00** | $220.00 | Purchased |
| **Total** | **33 Cases** | **$76.00** | **$648.00** | – |

At the end of the month, the system will calculate the **per-unit weighted average** of the Beginning Inventory and all purchases.

    

| [(3 x $16.00) + (10 x $20.00) + (10 x $18.00) + (10 x $22.00)] / (3 + 10 + 10 + 10) = $19.64 per case |
| --- |
| OR |
| $648 / 33 Total Cases = $19.64 per case |

If the **Standard Average** is used, then the calculation of the above numbers would be as follows:

( $16.00 + $20.00 + $18.00 + $22.00) / 4 = $19.00 per case

At the end of the month, the final count is **12 cases**. In using the per case cost, the amounts will be listed as follows:

- **Weighted Average:** 12 cases x $19.64 per case = **$235.68**
- **Standard Average:** 12 cases x $19.00 per case = **$228.00**

There is roughly a **$7 variance** between the Weighted Average and the Standard Average in this scenario. Using the Weighted Average rather than the Standard Average provides a greater level of precision when calculating costs.