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Fifo Livo and Avco

A-VicA-Vic Expertise GuaranteedRegistered Posts: 6,970
Ive been stuck on understanding stock and the treatment of above can someone help

Thanks in advance :001_smile:

Comments

  • rachy1975rachy1975 Trusted Regular Registered Posts: 366
    FIFO

    First In First Out

    so the stock you receive first is what goes out first at that price....example
    received 20 items at £4 cost each total = £80
    goin out 10 items at £4 each total = £40 stock left is 10 items total £40
    receive 20 items at £5 each so total stock is 30 items total £140
    goin out 5 items so the ones to go out are 5 £4 ones leavin total of 5 at £4 each and the 20 at £5 each = £120
    goin out 15 items so the 5 at £4 each go first and then 10 of the £5 ones total left is 10 at £5 each = £50

    same principle for LIFO but Last In First Out so you use the last ones in to go out first....

    Avco is the average so if you buy 10 at £5 total £50 then if you buy more of the same say....10 at £10 each you r total is the average £150 / 20 = £7.5 each so those goin out are £7.50 and you find the avco every time you buy more items..

    hope this helps

    :thumbup1:
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    Thanks rachael thats great gonna print that out at work tomoz and do some practise questions :thumbup:
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