How do calculate FIFO in accounting in php
How do you calculate FIFO?
to calculate sold goods purchase amount. Keep in mind that the prices paid by a company for its inventory often fluctuate. These fluctuating costs must be taken into account. Because prices are not fixed.
what are the advantages of FIFO calculation?
Two types of trusted methods are available to calculate the purchase cost of sold goods.
FIFO Method
This means First in First out, which means which products buy first we sold before them.
LIFO Method
This means Last in First out.
FIFO example.
Think about a Dell Store purchase some quantity of keyboard in different months with different prices. if they sell some quantity of the keyboard.
Like this purchase table:
Month Qty. Price Paid
September 200 Keyboard ?200.00 per.
October 275 Keyboard ?210.00 per.
November 300 Keyboard ?225.00 per.
December 500 Keyboard ?275.00 per.
Sell table:
Month Qty. Price Paid Sell Amount Purchase Price
December 600 Keyboard ?200.00 per. 200 Keyboard ?0
Note: Now we need to calculate the purchase price of these sold keyboards. so we follow the FIFO method here.
in details:
200 x ?200.00 = ?40,000.
275 x ?210.00 = ?57,750.
125 x ?225.00 = ?28,125.
Total: ?125,875.
if you want to see how we calculate and code fifo method in PHP watch now video.
Azad Mohammed
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