FIFO vs LIFO example

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Inventory cost accounting using the FIFO method versus using the LIFO method. The acronym FIFO stands for First In First Out. The acronym LIFO stands for Last In First Out. Both #FIFO and #LIFO are #costaccounting fictions that can lead to very different numbers of Cost Of Goods Sold and Gross Profit. Let’s work through a visual as well as a numerical example of FIFO versus LIFO.

⏱️TIMESTAMPS⏱️
00:00 FIFO vs LIFO
00:24 FIFO vs LIFO example
01:33 How do FIFO and LIFO work
03:04 FIFO vs LIFO inventory accounting
05:31 FIFO LIFO and COGS
09:14 FIFO vs LIFO summary

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FIFO adjustment from standard costing
LIFO inventory accounting

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business and #accounting vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investing decisions. Philip delivers #financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!

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Interesting example. We are always told LIFO always results in lower Gross Profits than FIFO as prices increase. However, in your May example you show how it can be higher in a given month.

andhywilliams

On @6:41 how is the jan 50* $5 500? the math should equal it to 250

YellowOreo

Thank you sir your explanations are simple and awesome

classiccatastrophe

Thanks alot, it helps me in this subject

TuanAnhNguyen-yvqd

Thank you, I just saw a meme about this and decided to learn about it. That’s actually really useful information for a small business owner

hushamalsaedy

Another great video! Thank you very much!!

jasontr

How did you get revenue 50 *10 = 500? where did you get unit price 10 from? how did you calculated that? please explain, thanks.

swapnasamuel

At minute 5:38, why the january is zero?

nisa

Hello:

where does the $10 in 50 * $10 = 500 in revenue for both Lifo and Fifo?

austinw

Thank you for making this great video, very help! Tot Zeins : )

derekmanning

is the $10 per unit the price to sell per unit?

trevormanger

How is the Revenue 200 in June calculation ? Please explain

nimisharajendra

Thank you for the great explanation! Keep it up!

GT

Why do you for FIFO assume that it's 200 x 6$ for February when you said before that only 100 were sold for that month? And why is it 200 for march then, if it were 200 originally? I don't understand !!!

david_sgnhm

Why are you using $50 with FIFO and LIFO

mr.punkie

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