Average Price Calculator

Weighted Average Price Calculator

Use this calculator to determine the weighted average price of an item when you've made multiple purchases at different prices and quantities. This is particularly useful for inventory management, investment tracking, or simply understanding the true average cost of something you've acquired over time.

function calculateAveragePrice() { var totalCost = 0; var totalQuantity = 0; var numRows = 5; // Number of input rows for (var i = 1; i <= numRows; i++) { var priceId = "price" + i; var quantityId = "quantity" + i; var priceInput = document.getElementById(priceId).value; var quantityInput = document.getElementById(quantityId).value; var price = parseFloat(priceInput); var quantity = parseInt(quantityInput); // Validate inputs if (isNaN(price) || price < 0) { price = 0; } if (isNaN(quantity) || quantity 0) { averagePrice = totalCost / totalQuantity; } document.getElementById("totalUnits").innerText = totalQuantity.toLocaleString(); document.getElementById("grandTotalCost").innerText = totalCost.toFixed(2).toLocaleString(); document.getElementById("averagePrice").innerText = averagePrice.toFixed(2).toLocaleString(); } // Run calculation on page load with default values window.onload = calculateAveragePrice;

Understanding Weighted Average Price

A weighted average price is a type of average that takes into account the relative importance (or "weight") of each value in a data set. In the context of pricing, this means that purchases with larger quantities will have a greater impact on the final average price than purchases with smaller quantities.

For example, if you buy 10 units of an item for $5 each, and then later buy 2 units of the same item for $10 each, a simple average would be ($5 + $10) / 2 = $7.50. However, this doesn't accurately reflect your overall cost because you bought many more units at the lower price.

The weighted average price, in this case, would be:
(10 units * $5) + (2 units * $10) = $50 + $20 = $70 (Total Cost)
10 units + 2 units = 12 units (Total Quantity)
Weighted Average Price = $70 / 12 units = $5.83

As you can see, the weighted average price ($5.83) is much closer to the price of the larger purchase ($5), providing a more realistic representation of your average cost per unit.

When to Use This Calculator:

• Inventory Management: To determine the average cost of goods sold (COGS) for accounting purposes, especially with methods like Weighted-Average Cost.
• Investment Tracking: If you buy shares of a stock or cryptocurrency at different prices over time, this helps you find your average cost basis per share/unit.
• Budgeting & Personal Finance: To understand the true average cost of frequently purchased items, helping you make better spending decisions.
• Business Analysis: For businesses that purchase raw materials or products in bulk at varying prices, calculating the weighted average helps in pricing strategies and profitability analysis.