Example of A Basic FIFO Flow

Here you will see an example of a basic FIFO flow in different procedures in MONITOR.

Historical Inventory Movements, List Type FIFO Balance

We purchase the parts PURCHASE1 and PURCHASE2. 100 pieces of both at 10 kronor (SEK) each.

We arrival report 100 pieces of PURCHASE1 and 5 pieces of PURCHASE2.

Then we arrival report 95 pieces of PURCHASE2.

This will be displayed in the following way in the Historical Inventory Movements procedure, list type FIFO balance:

Sample of list type FIFO balance in the Historical Inventory Movements procedure.

Historical Inventory Movements, List Type FIFO Balance

After the arrival, the supplier invoices will be linked:

We link the supplier invoice for PURCHASE1, 100 pieces at 10 kronor (SEK).

We link the supplier invoice for PURCHASE2, 5 pieces at 10 kronor (SEK).

Suddenly the supplier raises the prices and the remaining 95 pieces will instead be invoiced at 15 kronor each.

We link the supplier invoice for PURCHASE2, 95 pieces at 15 kronor (SEK).

This will be displayed in the following way in the Historical Inventory Movements procedure, list type FIFO balance:

Sample of list type FIFO balance in the Historical Inventory Movements procedure.

Price Calculation - Inventory Movements

Then a manufacturing order will be created for the part TEST which consists of one operation as well as PURCHASE1 and PURCHASE2.

The manufacturing order will be reported according to the planned values. You final report the order and it is then loaded to the Price Calculation - Inventory Movements procedure.

Here you can see that all records on the manufacturing order have been given a final price. You can also see that the final price is 10 kronor for the five first arrival reported pieces of part PURCHASE2. The remaining five pieces have the final price 15 kronor.

The manufactured part called TEST will now have an accrued actual price, FIFO price, of 122,50 kronor.

Sample of the Price Calculation - Inventory Movements procedure.

Historical Inventory Movements, List Type FIFO Balance

The FIFO balance list will be displayed in the following way after the manufacturing order has been price calculated.

Sample of the FIFO balance list after the price calculation has been performed.

Historical Inventory Movements, List Type FIFO Withdrawal

Now we receive a purchase order of 2 pieces of the part called TEST. We register the customer order and perform the delivery reporting. In the FIFO withdrawal list we can see at which manufacturing order and FIFO price these parts are valuated.

Sample of the FIFO withdrawal list after the delivery reporting has been made.

Inventory Value List

The Inventory Value List will be displayed in the following way when you choose to valuate material at the price alternative FIFO (without SO mark-up).

The Inventory Value List.

Historical Inventory Movements, List Type FIFO Balance

These prices are explained in the Historical Inventory Movements procedure, list type FIFO balance.

Historical Inventory Movements, list type FIFO balance.

Read more under Follow up on FIFO in Management Accounting you will see how FIFO can be followed-up in the management accounting.