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LIFO Calculator for Inventory

Two purchase lots followed by one sale. Units sold must not exceed total stock. Does not determine accounting-policy eligibility.

Two purchase lots followed by one sale. Units sold must not exceed total stock. Does not determine accounting-policy eligibility.

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Result

Enter your values and run the tool to see your result.

What this tool does

Costs sales on a last-in, first-out basis and reports COGS and closing inventory, using a model of two receipts and one sale.

How to use it

  1. Enter the first receipt’s quantity and unit cost.
  2. Enter the second receipt’s quantity and unit cost.
  3. Enter the quantity sold.
  4. Run it to get COGS and closing inventory.

Worked example

Receiving 100 at 10 and 100 at 12, then selling 150, draws from the later batch first: COGS is 100×12 + 50×10 = 1,700 and closing inventory is 500.

Calculation method

Cost of goods soldmin(sold,q2)*cost2+max(0,sold-q2)*cost1
Ending inventory valueq1*cost1+q2*cost2-(min(sold,q2)*cost2+max(0,sold-q2)*cost1)

Frequently asked questions

Is LIFO allowed where I operate?
This tool does not decide that. Accounting standards and tax rules differ on whether LIFO is permitted, so confirm with an accountant.
Why is COGS higher than under FIFO?
With rising costs, as in the example, the more expensive recent stock is expensed first. With falling costs the relationship reverses.

What this tool does not cover

Three or more batches, write-downs, returns, and multiple sales within the period are not handled.

References