The function has basically an IF and a VLOOKUP.

VLOOKUP
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VLOOKUP( Search_What, Search_Where, Returned_Column, Approximate_Match)
- Search_what = value to search for
- Search_Where = Source Range including column where to search Search_What
and column of values to return. Search_What is search only in first column of
Search_Where.
- Returned_Column = column number within Search_Where of the value to return
- Aprrox_Matc = False if only searching for an exact match of search_what in
first column of Search_Where. Else True (for approximate match).

Eg: VLOOKUP(Z1, $A$10:$D$100, 3, False)
- Search for value in Z1
- Search within first column of A10:D100, ie in A10:A100
- 3: When a match is found, return the corresponding value in the 3rd column
of A10:D100, ie in C10,C100
- Search for an exact match

(for more info on the lookup functions, check at the online file)

FULL FUNCTION
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=IF(UPPER(RIGHT(A2,6))=" TOTAL","",B2/VLOOKUP(A2&" TOTAL",$A:$B,2,FALSE))

means :

If the 6 last characters of A2 in uppercase are " TOTAL"
Then it is a total row so just return an empty string ""
Else A2 is a regular item so:
- search for its total (VLOOKUP): Search for value <A2 & " TOTAL" in
column A
and return corresponding value from B (ie total amount)
- return < B2 / total_amount from the above line
End If

I hope this helps,
--
Regards,
Sébastien