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Profits are ₹150000, ₹210000, ₹270000 and ₹330000, and the weights are 1:2:3:5. What is weighted average profit?

Answer and explanation

Correct answer: Approximately ₹275455

Weighted average profit is found by multiplying every profit by its corresponding weight, adding all weighted products, and dividing by the total of the weights. The weighted total is ₹1,50,000×1 + ₹2,10,000×2 + ₹2,70,000×3 + ₹3,30,000×5. These products are ₹1,50,000, ₹4,20,000, ₹8,10,000 and ₹16,50,000, giving a total of ₹30,30,000. The sum of weights is 1+2+3+5 = 11. Therefore, weighted average profit = ₹30,30,000 ÷ 11 = ₹2,75,454.55, which rounds to approximately ₹2,75,455. Option A is correct. Option C is only the weighted total, not the average, and the other amounts do not satisfy the weighted-average formula.

Related tags

Weighted AverageProfit CalculationGoodwill ValuationAccountancyGoodwillPartnership Accounts Basic ConceptsClass 12 Mcq

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