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-   -   Calculating Lifo/Fifo Methods (https://www.askmehelpdesk.com/showthread.php?t=528427)

  • Nov 23, 2010, 08:06 AM
    tammietoes
    Calculating Lifo/Fifo Methods
    Hi guys, I'm really confused with a Q I was hoping you could help me with!

    13 Jan purchases 200 - total cost 7,200
    08 Feb purchases 400 - total cost 15,200
    11 Mar purchases 600 - total cost 24,000
    12 April purchases 400 - total cost 14,000
    15 June purchases 500 - total cost 14,000

    10 Feb sales 500 - total sales 25,000
    20 Apr sales 600 - total sales 27,000
    25 Jun sales 400 - total sales 15,200

    Other expenses occurred amounting to €2,300

    I've to calculate the Fifo & Lifo and I'm so confused and pretty much pulling my hair out.. Please help! Thank you so much...
  • Nov 23, 2010, 08:58 AM
    pready

    The first thing you should do is calculate the cost per unit of your purchases.
    Jan 13 = 7,200 / 200 = $36 a unit
    Feb 08 = 15,200 / 400 = $38 a unit
    Mar 11 = 24,000 / 600 = $40 a unit
    Apr 12 = 14,000 / 400 = $35 a unit
    Jun 15 = 14,000 / 500 = $28 a unit

    Now you can calculate FIFO and LIFO

    FIFO stands for First-in first-out
    for your Feb 10 sales you will calculate the cost of inventory as
    13 Jan purchases of 200 units @ $36 a unit and the 8 Feb purchases of 300 units @ 38 a unit

    20 Apr Sales
    08 Feb Purchases of 100 units @ 38 a unit
    11 Mar purchases of 500 units @ $40 a unit

    25 Jun sales
    11 Mar purchases of 100 units @ $40 a unit
    12 April purchases of 300 units @ $35 a unit.

    Now all you need to do is calculate the total cost of sales and this will be your COGS

    LIFO stands for Last-in First-out and is calculated in a similar way
    10 Feb sales
    08 Feb purchases of 400 units @ $38 a unit
    13 Jan purchases of 100 units @ $36 a unit

    20 April sales
    12 April purchases of 400 units @ $35 a unit
    11 mar purchases of 200 units @ $40 a unit

    25 Jun sales
    15 Jun purchases of 400 units @ $28 a unit.

    Your remaining inventory will be:
    FIFO
    12 Apr purchases of 100 units @ $35 a unit
    15 Jun purchases of 500 units @ $28 a unit

    LIFO
    13 Jan purchases of 100 units @ $36 a unit
    11 Mar purchases of 400 units @ $40 a unit
    15 Jun purchases of 100 units @ $28 a unit
  • Nov 23, 2010, 03:21 PM
    tammietoes
    Comment on pready's post
    Thank you so much!

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