SAP Business One - FIFO Method Of Stock Valuation
The FIFO method assumes that the first items received into inventory are the first ones to be sold. This method matches the cost of goods sold (COGS) with the oldest inventory costs, which can provide a more accurate representation of costs when prices are changing over time. FIFO valuation under perpetual inventory system Date Transactions Units Sold Unit Cost Inventory Units May 1 Beginning Inventory 700 $10 700 May 3 Purchase 100 $12 800 May 8 Sale (*1) (500) ?? 300 May 15 Purchase 600 $14 900 May 19 Purchase 200 $15 1,100 May 25 Sale (*2) (400) ?? 700 May 27 Sale (*3) (100) ?? 600 May 31 Ending Inventory ?? (*1) 500 units sold = 700 units from beginning inventory of at $10 unit cost. Cost of goods sold = 500x$10 = $5,000 (*2) 400 units sold = 20...