STEP 1 -  CREATE A LIST OF YOUR PRODUCT LINE

The first task required in determining your weighted averages is to create a list of your planned product line. A Product Line is a major grouping of similar products. For instance, the product line for a furniture store might include; sofas, dining room sets, chairs, stereos, televisions, and beds. A car dealership's product line might include trucks, cars, and jeeps. Avon's product line includes cosmetics, jewelry, and household products.

To create your particular product line list, simply make a list of all the major products groups you intend to sell. Assume in our retail clothing example that John Smith's product line consists of the following six items: