FIFO, LIFO, AVERAGE, METODE PERPETUAL | UD. SAYANG KAMU #fifoperpetual

Summary

In this video, the presenter explains how to calculate the ending inventory, cost of goods sold, and gross profit using the perpetual inventory system and the FIFO (First In, First Out) method. Using a case study from UD Sayang Kamu, the video demonstrates step-by-step how to track inventory, handle purchases, sales, and returns, and update the stock using FIFO. The presenter covers how to compute the cost of goods sold and gross profit, making the process clear and easy to follow, with practical examples throughout.

Takeaways

• 😀 The FIFO (First In, First Out) method assumes that the first items purchased are the first items sold.
• 😀 The perpetual system tracks inventory in real-time, updating stock levels after every transaction.
• 😀 On July 1, 2022, the initial inventory was 500 units at a price of 9,000 each, totaling 4,500,000 IDR.
• 😀 On July 3, 2022, 300 units were purchased at 10,000 IDR each, adding 3,000,000 IDR to the inventory.
• 😀 On July 7, 2022, 400 units were sold, the first 400 units sold were taken from the initial July 1 inventory (priced at 9,000 IDR).
• 😀 After a sale of 100 units on July 8, the remaining inventory from July 1 was reduced to 100 units at 9,000 IDR, and 300 units were priced at 10,000 IDR.
• 😀 On July 15, 2022, another purchase of 300 units at 12,000 IDR each was made, adding 3,600,000 IDR to the inventory.
• 😀 A return of 100 units was made on July 16, 2022, reducing the July 15 purchase to 200 units priced at 12,000 IDR.
• 😀 On July 20, 2022, 300 units were sold, 300 units at 10,000 IDR were taken from the inventory.
• 😀 On July 21, 2022, a return of 100 units from the July 20 sale resulted in a reversal of 1,000,000 IDR in sales revenue, restoring 100 units at 10,000 IDR to the inventory.

Q & A

What is the FIFO method in inventory management?

FIFO (First In, First Out) is an inventory management method where the first items purchased are the first items sold. This means that the oldest inventory is sold first before newer inventory.

How does the perpetual inventory system work?

The perpetual inventory system continuously updates inventory levels in real-time. Every purchase and sale is recorded immediately, providing an up-to-date inventory count and value.

What is the impact of a return on the inventory system in the FIFO method?

When there is a return, the inventory system reflects the return by adjusting the inventory back into stock. In the FIFO method, returned items are added back at the most recent purchase price.

How is the cost of goods sold (COGS) calculated in the FIFO method?

In the FIFO method, the cost of goods sold is calculated by selling the earliest purchased inventory first. The total cost is derived by multiplying the quantity sold by the purchase cost of the earliest inventory.

What is the formula to calculate the gross profit of a business?

Gross profit is calculated by subtracting the cost of goods sold (COGS) from total sales revenue. The formula is: Gross Profit = Sales - COGS.

How do purchases and returns affect the calculation of net purchases?

Net purchases are calculated by adding the total purchases and subtracting returns. For example, if purchases total 600 units but 100 units are returned, the net purchase is 500 units.

What is the role of 'sales return' in the calculation of sales revenue?

Sales returns reduce the total sales revenue. When products are returned, they are subtracted from the total sales to calculate net sales revenue.

What are the components of the gross profit calculation?

Gross profit is determined by subtracting the cost of goods sold (COGS) from net sales revenue. It reflects the profitability of a company before accounting for operating expenses, taxes, etc.

How are purchases and sales recorded in the perpetual inventory system?

In the perpetual system, purchases are immediately added to the inventory, and sales are recorded by removing the corresponding items from stock, along with their associated costs.

Why does the FIFO method result in a higher inventory value during periods of rising prices?

The FIFO method results in higher inventory value in such periods because older, lower-cost inventory is sold first, leaving the more expensive, newer inventory in stock. This leads to a higher ending inventory value.