📦 FIFO/LIFO Inventory Costing Calculator

FIFO (First-In-First-Out) is a standard inventory costing method that assumes the oldest inventory is sold (expensed as COGS) first, while LIFO (Last-In-First-Out) assumes the most recently purchased inventory is sold first. For example, purchasing Lot 1 (100 units @ $10), Lot 2 (100 units @ $12), and Lot 3 (100 units @ $14) in that order, then selling 150 units: FIFO expenses all of Lot 1 (100 × $10) plus part of Lot 2 (50 × $12) as COGS = $1,600, leaving ending inventory of the remaining Lot 2 (50 × $12) plus all of Lot 3 (100 × $14) = $2,000. LIFO expenses all of Lot 3 (100 × $14) plus part of Lot 2 (50 × $12) as COGS = $2,000, leaving ending inventory of the remaining Lot 2 (50 × $12) plus all of Lot 1 (100 × $10) = $1,600.

In a period of rising unit costs, FIFO tends to report lower COGS and a higher ending inventory value, which can make reported profit look larger; LIFO does the opposite and can reduce taxable income in jurisdictions where it is permitted (LIFO is not allowed under IFRS and has restrictions in some countries — always confirm which method your jurisdiction's accounting standards permit before using this for actual financial reporting; this tool is for learning and conceptual comparison).