📦 FIFO Calculator for Inventory
Calculate inventory cost using First In First Out method
Inventory Purchases
Enter the quantity of items sold
How to Use This Calculator
Enter Inventory Purchases
Add each purchase with quantity, price per unit, and optionally the date. The calculator will use FIFO order (first purchases are sold first).
Enter Quantity Sold
Input the quantity of items you sold. The calculator will assume the oldest items (first purchases) are sold first.
Calculate
Click calculate to see the Cost of Goods Sold (COGS) and ending inventory value using the FIFO method.
Review Results
Examine the COGS and ending inventory value. In FIFO, older (usually cheaper) inventory is sold first, which affects your cost calculations.
Formula
FIFO Method:
First In First Out (FIFO) assumes that the oldest inventory items are sold first.
COGS = Sum of (Quantity Sold × Price) for oldest purchases first
Ending Inventory:
Ending Inventory = Sum of (Remaining Quantity × Price) for unsold items
Example: FIFO Calculation
Purchase 1: 100 units @ $10 each | Purchase 2: 200 units @ $12 each | Sold: 150 units
FIFO Calculation:
• Sell 100 units from Purchase 1: 100 × $10 = $1,000
• Sell 50 units from Purchase 2: 50 × $12 = $600
COGS: $1,000 + $600 = $1,600
Ending Inventory: 150 units from Purchase 2 @ $12 = $1,800
About FIFO Calculator for Inventory
The FIFO (First In First Out) Calculator helps businesses calculate inventory costs using the FIFO method, where the oldest inventory items are assumed to be sold first. This inventory valuation method is commonly used for accounting and tax purposes, especially when inventory costs are rising, as it results in lower cost of goods sold and higher ending inventory values.
When to Use This Calculator
- Inventory Valuation: Calculate cost of goods sold and ending inventory for financial reporting
- Tax Preparation: Determine inventory costs for tax purposes using FIFO method
- Financial Statements: Prepare accurate inventory valuations for balance sheets
- Cost Analysis: Analyze inventory costs and profitability
- Method Comparison: Compare FIFO results with LIFO or weighted average methods
- Accounting Compliance: Meet accounting standards that require FIFO inventory valuation
Why Use Our Calculator?
- ✅ Multiple Purchases: Handle any number of inventory purchases with different prices
- ✅ Automatic FIFO Ordering: Automatically applies FIFO logic to calculate costs
- ✅ Date Sorting: Optionally sorts purchases by date for accurate FIFO order
- ✅ Clear Results: Shows COGS and ending inventory value clearly
- ✅ Free Tool: No cost for essential inventory accounting
Common Applications
- Retail Businesses: Calculate inventory costs for retail stores
- Manufacturing: Value raw materials and finished goods inventory
- E-Commerce: Track inventory costs for online businesses
- Wholesale: Calculate costs for wholesale inventory management
Tips for Best Results
- Enter Purchases in Order: Enter purchases in chronological order or use dates for accurate FIFO
- Accurate Prices: Use actual purchase prices for accurate cost calculations
- Complete Records: Include all purchases to get accurate inventory valuation
- Regular Updates: Recalculate after each sale to maintain accurate records
- Compare Methods: Compare FIFO with other methods to understand cost differences
Frequently Asked Questions
What is FIFO and how does it work?
FIFO (First In First Out) assumes the oldest inventory items are sold first. When you sell items, the cost is based on the price of the oldest purchases. This method matches older costs with current revenue, which is useful when inventory costs are rising.
When should I use FIFO vs LIFO?
FIFO is often preferred when inventory costs are rising, as it results in lower COGS and higher profits. LIFO (Last In First Out) results in higher COGS during inflation. Many countries require FIFO for tax purposes, and IFRS accounting standards generally require FIFO.
How does FIFO affect my financial statements?
FIFO typically results in lower cost of goods sold and higher ending inventory values during periods of rising prices. This increases reported profits and assets, but also increases taxable income. During deflation, FIFO has the opposite effect.
Can I use FIFO for all types of inventory?
FIFO works best for inventory that actually flows first-in-first-out (like perishable goods). However, it can be used for any inventory type for accounting purposes. Physical inventory flow and accounting method don't have to match.
What if I don't know the exact purchase dates?
If you don't have purchase dates, enter purchases in the order you received them (oldest first). The calculator will use the order you enter them to apply FIFO. For accuracy, use purchase dates when available.
How does FIFO compare to weighted average cost?
FIFO uses specific purchase prices (oldest first), while weighted average uses the average cost of all inventory. FIFO is more complex but can better reflect actual cost flows. Weighted average is simpler but may not reflect current market prices.