Fifo Livo and Avco

A-Vic

Ive been stuck on understanding stock and the treatment of above can someone help

Thanks in advance :001_smile:

rachy1975

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-Vic

Thanks rachael thats great gonna print that out at work tomoz and do some practise questions :thumbup: