Kindly explain how the system calculates FIFO Valuation for single receipt.
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.
FIFO receipt value
1st goods receipt
2nd goods receipt
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.