[龍拳不變啦啦隊]

:) is there any simple way for doing the FIFO/LIFO/Weight average cost..@@ i was trying to look at my textbook, Personally i don't like textbook example because for me is way too complicated.

please help...I am focusing on FIFO/LIFO/Weight average corst...
thank you very much

[CK]

FIFO - FIRST IN, first out
LIFO - LAST IN, first out

I'll give you an example.

ABC Company

• Jan - Purchased 10 units at $5 each
• Feb - Purchased 8 units at $4 each
• Mar - Purchased 11 units at $3 each

ABC Company sold 20 units in the first quarter. Calculate the Cost of Goods Sold under each method.

FIFO - FIRST IN - So Jan is the earliest month, right?

Jan = 10 units * $5 = $50 <---- ABC Company Sold 20 units, so 20-10, 10 units left.

Feb = 8 units * $4 = $32 <----- 10 units left - 8 units. 2 units left.

Mar = 2 units * $3 = $6 <------ 2 units left - 2 units. Nothing left.

Therefore, using FIFO, the COGS is $50 + 32 + 6 = $88.

LIFO - LAST IN - So Mar is the latest month, right?

Mar = 11 units * $3 = $33 <---- ABC Company Sold 20 units, so 20-11, 9 units left.

Feb = 8 units * $4 = $32 <----- 9 units left - 8 units. 1 unit left.

Jan = 1 unit * $5 = $5 <------ 1 unit left - 1 unit. Nothing left.

Therefore, using LIFO, the COGS is $33 + 32 + 5 = $70.

Weighted Average

Find the AVERAGE purchased price and times by units sold -- find the total purchased price first then divide by the total units.

Jan = $5 x 10 units = $50
Feb = $4 x 8 units = $32
Mar = $3 x 11 units = $33
Total = $115

Total Units = 10 + 8 + 11 = 29 units

Weigted Average Per Unit = Total Purchased Price / Total Units Purchased

$115 / 29 units = ~$3.97 / unit

COGS = Weighted Average Per unit x Units Sold = $3.97 x 20 = $79.4

COGS using Weighted Average is ~$79.

good one CK :good: