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A sample first:

1) ProductA - purchased 100 quantity at 100 each - so the base price is \$100

2) ProductA - purchased another 100 quantity but this time at \$150 each. If we combine the two, the new base price would be \$125 correct? I just know that this is correct but I don't know it was derived. Anyone here would care to show me how?

What if we have this scenario instead?

  • Purchased 100 items for \$100 each - base price is \$100
  • Again we purchased 15 items for \$150 each - the new base price for this is I don't know..

What is the new base price for this item?

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I doubt the question will be retained, still (it is an application of Weighted Mean):

$$((p*q) + (s*t) / (q+t))$$

Where,
p - Price of item 1
q - Qty of item 1
s - Price of item 2
t - Qty of item 2

So,

$$((100*100)+(125*100))/(100+100)) = 125$$

The solution to the second part of the question is left as an exercise to the reader. ;)

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  • $\begingroup$ Re the first sentence: I do think this question is on-topic. $\endgroup$ – Srivatsan Dec 20 '11 at 17:03
  • $\begingroup$ @Srivatsan Just thought if it was too elementary. Never Mind, in fact it is good if we address the wider audience. $\endgroup$ – check123 Dec 20 '11 at 17:06
  • $\begingroup$ @check123 with other words the total amount of money divided by the total amount of items, isn't it? $\endgroup$ – user21385 Dec 20 '11 at 17:28
  • $\begingroup$ @lef2 Well said! $\endgroup$ – check123 Dec 20 '11 at 17:30
  • $\begingroup$ Thanks i get this now! Answer to the second part is $106.52 $\endgroup$ – officeboi101 Dec 20 '11 at 19:27

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