What is the FIFO inventory method?

FIFO stands for First-In, First-Out. It assumes the oldest inventory units are sold first. The cost of those earliest units becomes the Cost of Goods Sold (COGS), while the more recently purchased units remain in ending inventory. FIFO is widely accepted under both US GAAP and IFRS.

How does FIFO affect reported profit?

In a rising-price environment, FIFO produces lower COGS (older, cheaper units are sold first) and higher ending inventory value, resulting in higher reported gross profit and net income compared to LIFO. In falling-price environments the effect reverses.

What is the difference between FIFO and LIFO?

LIFO (Last-In, First-Out) assumes the newest units are sold first, which increases COGS and decreases ending inventory value when prices rise. LIFO is allowed under US GAAP but prohibited under IFRS. FIFO is permitted worldwide and tends to better reflect physical inventory flow for perishable goods.

Can I sell more units than I have in inventory?

No. The calculator validates that total units sold does not exceed total units purchased. If you enter more units sold than available, an error message will appear asking you to correct the quantities.

Does the order of lots matter?

Yes. FIFO processes lots in the order they are listed (top to bottom). If you entered lots out of chronological order, use the move buttons to reorder them so the oldest purchase appears first.

FIFO Inventory Calculator

Name: FIFO Inventory Calculator
Availability: InStock
Author: Nham Vu

Enter your inventory purchase lots and sales quantities to calculate COGS and ending inventory value using the FIFO accounting method.

Purchase Lots

Total Units Sold

Enter the total number of units sold during the period.

Add purchase lots and units sold, then click Calculate.

Cost of Goods Sold (COGS)

$0.00

0 units sold

Ending Inventory Value

$0.00

0 units remaining

Total Units Purchased

Total Purchase Cost

$0.00

Avg. Cost / Unit

$0.00

COGS Breakdown by Lot (FIFO Order)

Lot	Cost/Unit	Qty Available	Qty Sold	COGS

Remaining Inventory by Lot

Lot	Cost/Unit	Units Remaining	Value

Summary

Enter your inventory purchase lots and sales quantities to calculate COGS and ending inventory value using the FIFO accounting method.

How it works

Add one or more purchase lots by entering the date, quantity bought, and unit cost.
Enter the total number of units sold during the period.
Click Calculate to run the FIFO algorithm.
The tool exhausts the earliest lots first, computing COGS layer by layer.
View the COGS breakdown, ending inventory value, and remaining lot detail.

Use cases

Small business owners calculating cost of goods sold for tax or accounting purposes.
Accountants verifying FIFO inventory valuations for financial statements.
Students learning how FIFO differs from LIFO or weighted-average costing.
E-commerce sellers tracking profitability across multiple purchase batches.
Retailers performing period-end inventory reconciliation.
Manufacturers valuing raw material usage under FIFO assumptions.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu