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Ted demonstrates how to create a totaling column formula in Excel using a spreadsheet with imaginary employee data. The formula calculates the total number of weeks worked and total hours worked by employees. To do this, a new column labeled "total" is added at the bottom of the table, and the sum formula is used in cell B12 for an easier calculation process. Using the sum formula simplifies the process rather than manually adding each cell, making it more efficient in Excel.