How To Calculate Cost Of Goods Sold Using Fifo

Units Sold: Cost Per Unit: Starting Inventory: Calculate Result:

Introduction: Understanding the Cost of Goods Sold is crucial for businesses. This calculator simplifies the process, especially when using the FIFO method.

Formula: The formula for calculating COGS using FIFO is straightforward: COGS = (Units Sold * Cost Per Unit) + Starting Inventory.

How to Use:

1. Enter the number of units sold.
2. Input the cost per unit.
3. Specify the starting inventory.
4. Click the “Calculate” button to get the result.

Example: Suppose you sold 100 units at $5 each, with a starting inventory value of $200. The COGS using FIFO would be (100 * $5) + $200 = $700.

FAQs:

1. Q: What is FIFO? A: FIFO stands for First In, First Out. It’s an inventory costing method where the oldest products are sold first.
2. Q: Why is COGS important? A: COGS is vital for determining a company’s profitability by subtracting it from revenue to calculate gross profit.

Conclusion: Calculating COGS using FIFO is now hassle-free with our calculator. Stay informed about your business finances for better decision-making.