FIFO Inventory Cost Calculator

FIFO Inventory Valuation Tool

Input Fields

Units in ending inventory

EI

Number of units remaining at the end of the period

Purchase Batch 1 (units)

U1

Units purchased in the first batch

Purchase Batch 1 (cost per unit)

C1

$

Purchase Batch 2 (units)

U2

Purchase Batch 2 (cost per unit)

C2

$

Purchase Batch 3 (units)

U3

Purchase Batch 3 (cost per unit)

C3

$

CalculateReset

Calculate automaticallyIf enabled, the result will update automatically when you change any value.

Your Results

FIFO Ending Inventory Cost

Leave a Comment

How did this result make you feel?

0😀 Like 0💡 Helpful 0😕 Confused 0😞 Disappointed 0❌ Inaccurate

FIFO Cost of Goods Sold Formula

$$\text{COGS}_{\text{FIFO}} = \sum \left( \text{Cost of Oldest Units} \times \text{Quantity Sold from Each Batch} \right)$$

Explanation:
Under FIFO, the cost of the oldest inventory is used first to calculate the cost of goods sold (COGS). This method matches real-world stock movement in most industries and typically results in lower COGS and higher net income during inflation.

FIFO (First-In, First-Out) is one of the most widely used inventory costing methods in accounting. It reflects the physical flow of inventory in businesses like grocery stores, manufacturers, and e-commerce where older items are sold first.

Use Cases:

• Inventory tracking for financial reporting
• Estimating profit margins
• Preparing tax documentation
• Comparing FIFO vs. LIFO inventory costs

Example:
You purchased:

• 100 units at $5
• 200 units at $6
  You sold 250 units.
  FIFO COGS = (100 × $5) + (150 × $6) = $500 + $900 = $1,400