Weighted Average or Absolute basis–
It is summation of the products of qualitative and quantitative factors. For example, to calculate absolute Ton-Km for a goods transport is calculated as follows.:
∑(Weight Carried × Distance)1 + (Weight
Carried × Distance)2 +….+(Weight
Carried × Distance)n
Similarly, in case of Cinema theatres, price for various classes of seats are fixed differently.
For example–
First class seat may be provided with higher quality service and hence charged at a higher rate, whereas Second Class seat may be priced less. In this case, appropriate weight to be given effect for First Class seat and Second Class seat – to ensure proper cost per composite unit.
First class seat may be provided with higher quality service and hence charged at a higher rate, whereas Second Class seat may be priced less. In this case, appropriate weight to be given effect for First Class seat and Second Class seat – to ensure proper cost per composite unit.
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