# Lifo, fifo, and avco

I need to understand how to do the above valuation accounting it is very confusing to me could you create some steps so that I can follow or a simpler way to understand it. Thank you.

 ms180sx Posts: 64, Reputation: 29 Junior Member #2 Mar 14, 2008, 12:02 PM
lifo is last in first out. Fifo is first in first out.
They're a way of calcultating costs.
Say u buy 5 widgets at 5 dolalrs in month 1, don't sell any
then u buy 10 widgets at 10 dollars in month 2
then you sell 12 widgets. How much was the cogs?
using last in first out, the 10 went first, so \$100, then 2 more at 5\$, so a total of \$110.00
using the first in first out, you sold all 5@ \$5.00, or 25, then 7 @ 10, or 70 = total of \$95.oo

I'm not to sure what avco is about, still in my second accounting class.
 maqsood Posts: 2, Reputation: 1 New Member #3 Nov 4, 2009, 09:23 PM
Avco is average cost of goods sold
Total purchases divided by its units
 farahsyeda Posts: 2, Reputation: 1 New Member #4 Oct 19, 2012, 10:24 AM
I have this question on fifo and avco please anyone can help.
On 1st dec abc company held 300 units goods of 5\$
Goods purchased:
11th December 500 units at 11\$
19th dec 500 units for 12\$
26th December 500 units for 14\$

Goods sold:
13th dec 600 units for 18\$
21th dec 400 units for 18\$
26th dec 200 units for 18\$

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