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# FIFO Full form & Its notorious sister LIFO in Business

Last updated on June 25th, 2024 at 01:43 pm

FIFO Full form stands for first in first out, and is an inventory valuation method available under most of the accounting standards like IFRS, U.S GAAP. However, in this article we shall discuss also, how this accounting method compares with LIFO.

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FIFO full form stands for first in first out. A simple analogy to understand this could be:

#### Question 2

Q: On May 20, I sold 180 widgets. The remaining inventory from the May 5 purchase is 150 widgets at $12 each, and I purchased 100 widgets at$13 each on May 15. What is the COGS for the May 20 sale?

A:

•   150 widgets from the May 5 purchase at $12 each: 150 \times 12 =$1800
•   30 widgets from the May 15 purchase at $13 each: 30 \times 13 =$390

#### Question 4

Q: After the May 30 sale, how many widgets do I have left in inventory and at what cost?

A:

•   100 widgets from the May 25 purchase at $14 each: 100 \times 14 =$1400
•   Total ending inventory cost: $1400 #### Question 5 Q: What is my total cost of goods sold (COGS) for May if I had sales on May 10, May 20, and May 30 with the respective COGS calculated as$1600, $2190, and$1610?

A:

•   Total COGS for May: 1600 + 2190 + 1610 = \$5400

## Conclusion

I know, this was a long post for something this simple but I don’t care about the concept academically! I mean think about this analyst, even he knows LIFO and I am sure millions know it as well.

However, look at how a simple concept like FIFO, when learnt with the correct perspective and avert disasters worth billions.

So if you want to learn analysis that matters, then do care to check out our financial modeling course, which makes you more capable than educated.

Ciao!