FIFO, LIFO AND THE OTHER ONE!! LOL

System

Ok I think I understand the First In, first out - therefore the stock you have left you work backwards with the stock costs you have!<BR><BR>Then LIFO is totally geting me confused.<BR><BR>I think I understand the idea - but if you bought tins of beans say each week and you do not ever run out of stock. Then at the end of the year the First in would still be there in theory! So am I right in thinking that if you traded for 3 years and never let the beans run out of stock then the cost of those beans would have been the first ones you bought - ie 3 years ago making it nearly inpossible to trace what you paid for them 3 years ago.<BR><BR>As for the AV?? I havent a clue!!!<BR><BR>HEEEELLLLPPPP!!!!!

System

FIFO, LIFO AND THE OTHER ONE!! LOL

Average weighted is along the lines of...if you bought<BR><BR>10 tins at 10p<BR>15 tins at 12p = 25 tins at (10+12/2) = 11p<BR>20 tins at 15p = 45 tins at (10 + 12 +15/3) = 12p<BR><BR>and so on.<BR><BR>Not really sure on the LIFO - Soz!<BR>P

System

FIFO, LIFO AND THE OTHER ONE!! LOL

Hi Amanda.<BR><BR>You have to bear in mind that it's only the valuation that is LIFO, you don't actually issue the newest product. All stock receipts/issues are recorded on the stock record card so you will always know how much you paid, how much you sold for and running balances. Your cost of sales and therefore profit will be different depending on which method used.<BR><BR>Scott.

System

FIFO, LIFO AND THE OTHER ONE!! LOL

I understand the stock rotation - have you got anything to help understand how its recorded then? On the so called Stock card!<BR><BR>Amanda

System

FIFO, LIFO AND THE OTHER ONE!! LOL

Emailed you something that may or may not help

System

FIFO, LIFO AND THE OTHER ONE!! LOL

Thanks Sharon<BR><BR>Im with Premier too, so I have the sheets!<BR><BR>I think its because the books always show 2 weeks worth of stock and not over a year, which is why I think im getting confused with the LIFO.<BR><BR>I think I will have another go at the questions in my books!!<BR><BR>Amanda

System

FIFO, LIFO AND THE OTHER ONE!! LOL

LIFO example:<BR>Receipts<BR>Date Quantity Unit Price <BR>01/01 10 £1.00<BR>02/01 20 £1.50<BR>03/01 15 £2.00<BR><BR>On 04/01 5 units were issued, on 05/01 20 units were issued, what is the value of the stock that remains?<BR><BR>So on 04/01 5 @£2.00 were issued (last units in - issued first) leaving:<BR>10@£1.00, 20@£1.50 and 10@£2.00<BR><BR>On 05/01 10@£2.00 and 10@£1.50 were issued leaving:<BR>10@£1.00 and 10@£1.50<BR>Total of 20 units with a total value of £25.00<BR><BR><BR>Does this help in anyway at all? Happy to help further if required - I (sadly) really enjoyed this topic!!!<BR>

System

FIFO, LIFO AND THE OTHER ONE!! LOL

I think I understand it, its just examples all ways work as they are only for 3 weeks, lol<BR><BR>So on your example, if you never let your stock go below 11 you will always have the 10 @ 1.00<BR>So in 3 years time, how do you remember that you paid £1 for them first 10<BR><BR>

System

FIFO, LIFO AND THE OTHER ONE!! LOL

Hi Amanda<BR><BR>The only way is to keep a constant running total. In industry most companies use the FIFO method or simply use the latest price to value stock on the assumption that all the early stock has been used up (based on the accounting practise of keeping stock to a minimum level - this ensures that only the required amount is ever held as therefore the rotation is constant and up-to-date).<BR><BR>Large companies would be unlikely to have the resources to keep a running total that LIFO or AVCO would need.<BR><BR>In answer to your question, yes - all the time that there is a minimum of 10 in stock - the value of those 10 would be £1.00 each.<BR><BR>It's a strange method and as such, is rarely used.<BR><BR>Hope that helps!