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# FIFO & LIFO Calculator

Enter units, their costs, and total units sold into the FIFO LIFO calculator and it will calculate the goods’ cost, goods sold, units remaining, and remaining inventory.

No. of Purchases

• Unit

Price/Unit

• Unit

Price/Unit

• Unit

Price/Unit

• Unit

Price/Unit

• 5 Purchases
• 10 Purchases
• 15 Purchases
• 20 Purchases
• 50 Purchases

Total Units Sold

The lifo fifo calculator estimates the remaining value of inventory and cost of goods sold(COGS) by using the FIFO and LIFO method.  The product inventory management becomes easy with the assistance of this calculator for first-in-first-out and last-in-last-out.

## What Is An Inventory?

It is referred to as a company’s goods in three stages of production including:

1. The items that are raw materials
2. The items that are in production
3. The items that are finished and ready for sale

In other terms, you just get the goods that the company has in the starting, very next, add the material that is purchased to generate more goods, then, subtract the goods that the company sold, the COGS is an acronym for the cost of goods sold, and the result is what remains – are said to be as an inventory.

The given formula helps in inventory calculation:

BI+ Net Purchases −COGS=EI

Where:

• BI is the Beginning inventory
• EI is the Ending Inventory

## What Is FIFO – First In First Out Method?

FIFO stands for first in first out! It is an inventory management term that means the items that were added first to the stock will be removed from stock first.  During the period of inflation, FIFO will outcome in the lowest estimate of cost of goods sold among the three approaches and even the highest net income.

## What Is LIFO – Last In First Out Method?

LIFO or Last in first out is an efficient technique that is used in the valuation of the inventory value, the goods that were added at the last to the stock will be removed from the stock first.  In simple words, the inventory by LIFO assumes the most recent items added to the inventory are sold first.  When it comes to periods of inflation, the use of last-in-first-out will outcome in the highest estimate of the COGS among the three approaches and the lowest net income.

## How To Calculate FIFO And LIFO?

### FIFO:

If you want to calculate the cost of goods sold(COGS) concerning the FIFO method, follow the below-mentioned steps:

• Figure out the price of the inventory
• Multiply the cost by the total units sold

### LIFO:

If you want to calculate the Cost of Goods Sold (COGS) by suing the LIFO method, then go through the following steps:

• Find out the number of units purchased
• Now, multiply it by the units purchased price to calculate COGS

## Example:

Let’s suppose that there is a Mike’s Television Company that has been in operation now for a year; this is what his inventory costs look like:

 Month Number of units Price Paid January 100 $800.00 February 100$800.00 March 100 $825.00 April 100$825.00 May 100 $825.00 June 100$850.00 July 100 $850.00 August 150$875.00 September 150 $875.00 October 150$900.00 November 150 $900.00 This means the total units that are acquired are 1450 Units = Televisions Now calculate cost of goods sold(COGS) Solution: The FIFO Method: When it comes to the FIFO, Mike needs to utilize the older selling price of acquiring his inventory and work ahead from there. So, the COGS calculation is as follows: • 200 units x$800 = $160,000 • 300 units x$825 = $247,500 • 200 units x$850 = $170,000 • 300 units x$875 = $262,500 • 100 units x$900 = $90,000 Mike’s COGS is$930,000.

The LIFO Method:

Calculate COGS as below:

• 450 units x 900 = $405,000 • 300 units x 875 =$262,500
• 200 units x 850 = $170,000 • 150 units x$825 = $125,750 COGS is$961,250.

## FIFO Vs. LIFO:

• If the ending inventory prices are going up, or are likely to increase, the LIFO method  may be better as the higher-cost units are accounted to be sold
• If the opposite is true, and the ending prices are going down, then calculate ending inventory by FIFO approach might be better. Since the selling prices usually increase, it  helps to determine the profit margin

$$\ Profit\ margin\ Formula =\dfrac{Revenue}{Profits}⋅100 \ percent$$

• To evaluate more accurately, use the FIFO ending inventory approach, as this valuation assumes that older less-costly units sold on the priority