The Price Change of Jilin Traditional Warehouse Management

First-in first-out method refers to the method of calculating the cost of issuing inventory based on the unit price of first-in inventory according to the principle of first-in first-out. The specific way to adopt this method is to calculate the cost of issuing inventory according to the unit price of the opening balance of inventory, and then calculate the cost of issuing inventory and ending inventory according to the unit price of the first batch of inventory after receiving and dispatching, and so on.

First-in first-out method is one of the valuation methods of inventory. It is based on the assumption that the goods purchased first are collected or sent first. The ending inventory calculated by FIFO method is closer to the market price.

First-in, first-out method is a method of pricing the issued inventory on the premise that the inventory purchased first is issued first. Using this method, the cost of inventory purchased first is transferred out before the cost of inventory purchased later, and the cost of issuing inventory and ending inventory is determined accordingly.

example

Example 1

Assuming that the inventory is zero, buy 1 00 2 yuan units of product A on1day; On the 3rd, I bought 50 products A with the unit price of 3 yuan.

If 50 A products are sold on the 5th, the unit price is 2 yuan, and the cost is 100 yuan.

The first-in first-out method assumes that the materials put into storage first are consumable materials, and the materials in storage at the end of the period are the materials put into storage recently, so the materials issued are calculated according to the unit cost of the materials put into storage first.

Example 2

For sales, the inventory obtained first is sold first, so the closer to the date of inventory, the closer the inventory value is to the current replacement value. When the price rises, this method will lead to the reduction of commodity sales cost and more surplus.

For example, the inventory situation is as follows;

1, 65438+ 10/month 1, 10 for each piece, 5 yuan, subtotal 50 yuan.

2.4 months 1 day, buy 10 pieces every 6 yuan, and subtotal 60 yuan.

3.8 months 1 day, buy 10 pieces every 7 yuan, and subtotal 70 yuan.

4. 65438+February 1, 10 each 8 yuan, with the subtotal of 80 yuan.

Assume that the inventory quantity on June 3rd 1 day is 15, the ending inventory value is 65438+February 1, 10, August1day, and the total inventory value is 165438+.

As far as the computer data structure is concerned, the way in and out of data is called sorting, from one end to the other, just like queuing.

The difference between FIFO method and LIFO method

1. First-in, first-out: when issuing inventory, we should adhere to the principle of first purchase and first delivery.

2. LIFO method: When issuing inventory, we should adhere to the principle of "purchasing first, issuing first".

The above two methods refer to the pricing method of issuing inventory, which has nothing to do with the actual issuing order of inventory itself. For example, in March 1, I bought 3 A products at the unit price of 8 yuan/piece; On March 5th, I bought 9 products A at the unit price of 7 yuan/unit; At the beginning of March, there were two products A, the unit price was 10 yuan/product. Eight Class A products were released in March. The pricing of eight A products issued here is: (1), FIFO: 2* 10+3*8+3*7=65 yuan; (2) LIFO method: 8*7=56 yuan.

Application of first-in first-out method

The first-in-first-out method refers to the method of pricing the issue and balance of inventory according to the assumption that the inventory purchased first is issued first. The commodity inventory priced by FIFO method is the last purchased commodity inventory. In the market economy environment, the prices of various commodities are always fluctuating. On the premise that the price rises too fast, the cost of inventory purchased first is relatively low, and the cost of inventory purchased later is on the high side. In this way, the value of the issued inventory is lower than the market value, the product sales cost is low, and the ending inventory cost is high. However, because the commodity price is calculated according to the recent market price, the income is more, and the sales income and sales cost do not conform to the matching principle, so the calculated profit is on the high side, resulting in inflated profit, which is essentially "inventory profit".

Because of inflated profits, it will increase the burden of corporate income tax, increase dividends to investors, and lead to an increase in corporate cash outflows. However, from the perspective of fund-raising, more profits, higher inventory value and higher turnover rate mean that the enterprise is in good financial condition, which will win the public's trust in the enterprise and enhance investors' investment confidence, and the size of profits is often an important yardstick to evaluate the performance of an enterprise leader. Many enterprises evaluate the performance of enterprise managers according to the level of profits, and reward managers according to the evaluation results. At this time, managers are often willing to adopt the first-in first-out method, because doing so will overestimate the profit level during their term of office and thus obtain more direct benefits.

Matters needing attention in using first-in first-out method

First-in, first-out method, the final materials are calculated according to the nearest unit cost, which is close to the current market price, so the balance sheet can more truly reflect the financial situation; However, because the material cost issued in this period is calculated according to the material cost purchased in the previous period, the direct material cost included in the product cost may be underestimated, and the income statement of these products will not be true enough when they are sold.

Applicability of FIFO method

According to the requirements of the principle of prudence, the first-in first-out method is suitable for commodities whose market prices are generally in a downward trend. Because the FIFO method is adopted, the ending inventory balance is calculated according to the final purchase price, which makes the ending inventory price close to the current price and truly reflects the ending assets of the enterprise; The book price of ending inventory reflects the lower price of the last purchase. For products with declining market prices, it meets the requirements of the principle of prudence, which can resist the impact of falling prices, reduce the business risks of enterprises, and eliminate the hidden dangers of potential losses, thus avoiding enterprises from inflating their book assets due to false inventory funds. At this time, if the LIFO method is adopted, the book inventory will always be priced at the original high price under the condition of maintaining a certain balance of inventory materials, which causes the inconsistency between the circulation of inventory costs and the physical circulation.

Advantages and disadvantages of FIFO method

Its advantage is that enterprises can't choose inventory pricing at will to adjust current profits, and its disadvantage is that the workload is complicated, especially for enterprises with frequent inventory in and out. Moreover, when the price rises, it will overestimate the current profit and inventory value of the enterprise; On the contrary, it will underestimate the enterprise inventory value and current profit.

In the case of inflation, the first-in first-out method will increase profits and increase corporate tax burden, which is not conducive to the capital preservation of enterprises. Moreover, the first-in-first-out method needs to price the issued materials one by one and register the issuance and balance of the subsidiary ledger, and the accounting procedures are cumbersome.