2:35 or must it be 2.5?
Concerning the example:
If 2:35 is displayed for a standard time-value, the numerical representation should be 0.107638889
(155/24/60 = 155/1440 = 31/288).
Please note that also a date-time value containing a (high) integer part can be displayed this way if formatted H:MM. Time-formatted display is often lying.
2.5 on the other hand, interpreted as a time, would be 2 and 1/2 days being 60 h (60:00).
Concerning AVERAGE() it will work on numbers independent of how they are formatted. You may need to format the result properly if you want to get it in a specific way.
Once again: Formatting of numbers sometimes suppresses a more significant part. Arithmetic operators and functions will, however, always include the complete value.
Just adding that if duration times > 24h are to be handled or expected of a calculation, the format code [H]:MM will display the proper duration hours instead of wrapping them to “wall clock” values.