Periodic Receipts – Single Receipts: Example
Business Transactions for Material A in a Period
|
Quantity |
Price |
Stock posting | |
Purchase order |
100 pieces |
$10.00 |
|
1st goods receipt for purchase order |
20 pieces |
= $200.00 | |
2nd goods receipt for purchase order |
80 pieces |
= $800.00 | |
Invoice |
50 pieces |
$12.00 |
= $100.00 |
Goods issue |
70 pieces |
||
Closing stock |
30 pieces |
FIFO Valuation Based on Period Receipts
When you use period receipts as a basis, the value of the receipts for the period is $1100.00 for a receipt quantity of 100 pieces.
The FIFO value of the closing stock is thus 30 pieces x $1100.00 / 100 pieces = $330.00.
FIFO Valuation Based on Single Receipts
When you use single receipts as a basis, the system splits up the values from invoices among the goods receipts in chronological order on a progressive quantity fill-up basis.
|
Quantity |
Value |
FIFO receipt value | |
1st goods receipt |
20 pieces |
200.00 |
= $240.00 |
2nd goods receipt |
80 pieces |
800.00 |
= $860.00 |
The FIFO value of the two goods receipts is calculated as follows:
$200.00 + (20 pieces x $100.00 / 50 pieces) = $240.00 or
$800.00 + (30 pieces x $100.00 / 50 pieces) = $860.00
The FIFO value of the closing stock is thus 30 pieces x $860.00 / 80 pieces = $322.50.