How do you calculate ending inventory using FIFO?

How do you calculate ending inventory using FIFO?

To calculate FIFO (First-In, First Out) determine the cost of your oldest inventory and multiply that cost by the amount of inventory sold, whereas to calculate LIFO (Last-in, First-Out) determine the cost of your most recent inventory and multiply it by the amount of inventory sold.

How do you find the ending inventory example?

For example, say a company starts the month with 50 units of inventory, purchases another 4 units of inventory and sells 25 units of inventory. Ending inventory is 50 plus 4 minus 25, or 29 units.

How do you calculate FIFO cost and LIFO?

What is FIFO method with example?

Example of FIFO Imagine if a company purchased 100 items for $10 each, then later purchased 100 more items for $15 each. Then, the company sold 60 items. Under the FIFO method, the cost of goods sold for each of the 60 items is $10/unit because the first goods purchased are the first goods sold.