MW SysArcKnowledge Platform
Menu

Accounting learning tool

LIFO Inventory Calculator

Calculate cost of goods sold and ending inventory for two purchase layers using last-in, first-out.

Runs locally

Inputs and results stay in this browser. Currency symbols are illustrative; use any consistent currency.

LIFO cost of goods sold$1,360.00
Ending inventory$600.00
Ending units60

Understand LIFO inventory

One idea, three depths

Choose how deeply to explain LIFO inventory

LIFO inventory: Calculate cost of goods sold and ending inventory for two purchase layers using last-in, first-out.

Age 5Explain it to a 5-year-oldStart with a picture

Imagine using LIFO inventory to answer this question: calculate cost of goods sold and ending inventory for two purchase layers using last-in, first-out? Enter Older layer units, Older unit cost, Newer layer units, and 2 other inputs; the calculator shows LIFO cost of goods sold. For example: Selling 120 units from 100 units at $10 and 80 at $12 gives LIFO COGS of $1,360. The answer tells you LIFO cost of goods sold.

Age 15Explain it to a 15-year-oldConnect it to the formula

LIFO leaves older costs in ending inventory. LIFO is not permitted under every reporting framework, so verify the applicable accounting rules. The rule is LIFO assigns the newest available unit costs to goods sold first. Its input values are Older layer units, Older unit cost, Newer layer units, Newer unit cost, Units sold, and the main result is LIFO cost of goods sold. For example: Selling 120 units from 100 units at $10 and 80 at $12 gives LIFO COGS of $1,360.

CollegeExplain it at college levelState the model precisely

This calculator evaluates one accounting relationship within a consistent entity, currency, reporting period and recognition policy. The implemented relation is LIFO assigns the newest available unit costs to goods sold first, evaluated from Older layer units, Older unit cost, Newer layer units, Newer unit cost, Units sold to produce LIFO cost of goods sold. LIFO leaves older costs in ending inventory. LIFO is not permitted under every reporting framework, so verify the applicable accounting rules. Recognition, measurement, tax, consolidation, foreign-currency and disclosure rules may require adjustments under the accounting framework that applies to the entity.

What this accounting tool does

Calculate cost of goods sold and ending inventory for two purchase layers using last-in, first-out.

Why the relationship works

LIFO leaves older costs in ending inventory. LIFO is not permitted under every reporting framework, so verify the applicable accounting rules.

The accounting formula

LIFO assigns the newest available unit costs to goods sold first

Inputs and period consistency

This model uses Older layer units, Older unit cost, Newer layer units, Newer unit cost, Units sold. Use the same reporting period, currency, entity boundary and accounting policy for every input.

What the result means

The primary output is LIFO cost of goods sold; supporting outputs include Ending inventory, Ending units. Trace each amount back to the relevant ledger or statement line before relying on it.

Worked accounting example

Selling 120 units from 100 units at $10 and 80 at $12 gives LIFO COGS of $1,360.

Limits of this compact model

The calculator teaches one relationship. Recognition, measurement, tax, consolidation, foreign-currency and disclosure rules may require additional adjustments under the framework that applies to the entity.

Build the whole topic

Continue learning and calculating

Browse all accounting toolsInventory and long-lived assets learning stageBusiness decision toolsPersonal finance toolsEconomics toolsSearch every MW SysArc tool

Keep going

accounting

Weighted-average inventory

Calculate weighted-average unit cost, cost of goods sold and ending inventory for two purchase layers.

accounting

Days in inventory

Estimate how many days of cost of goods sold are represented by average inventory.

accounting

Contract Asset Roll-Forward

Reconcile opening contract assets with revenue recognised ahead of billing and amounts transferred to receivables.

accounting

Accounts Receivable Roll-Forward

Reconcile gross receivables using opening balance, credit sales, collections, write-offs and adjustments.

Supporting sourcesAcademic referencesPrimary standards, textbooks and complete citations

Standards, reading and academic references

Use the calculator as the worked interaction, then consult the primary standards and academic textbooks listed below. MW SysArc links to the original sources; the explanation on this page is original and does not reproduce them.

Principles of Accounting, Volume 1: Financial Accounting

Read the free OpenStax financial accounting textbook
Cite this book
APA 7
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters
MLA 9
Franklin, Mitchell, et al. Principles of Accounting, Volume 1: Financial Accounting. OpenStax, 2019, https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters.
Chicago author-date
Franklin, Mitchell, Patty Graybeal, and Dixon Cooper. 2019. Principles of Accounting, Volume 1: Financial Accounting. Houston, TX: OpenStax. https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters.

OpenStax entries are free to read online. Follow the licence shown on each linked source before redistributing or adapting its content.

Reuse the page responsiblyCite this pageAPA, MLA, Chicago, Harvard, BibTeX and RIS

These formats cite this calculator page itself. They are separate from the academic references above, which support the mathematical method and terminology.

Organizational author: MW SysArc. Published:. Canonical page:https://accounting.mwsysarc.com/lifo-inventory-calculator.

APA 7

MW SysArc. (2026, July 21). LIFO Inventory Calculator. MW SysArc Tools. https://accounting.mwsysarc.com/lifo-inventory-calculator

MLA 9

MW SysArc. “LIFO Inventory Calculator.” MW SysArc Tools, 21 July 2026, https://accounting.mwsysarc.com/lifo-inventory-calculator. Accessed 26 Aug. 2026.

Chicago 17

MW SysArc. “LIFO Inventory Calculator.” MW SysArc Tools. Published July 21, 2026. Accessed August 26, 2026. https://accounting.mwsysarc.com/lifo-inventory-calculator.

Harvard

MW SysArc (2026) ‘LIFO Inventory Calculator’, MW SysArc Tools. Published 21 July 2026. Available at: https://accounting.mwsysarc.com/lifo-inventory-calculator (Accessed: 26 August 2026).

BibTeX and RIS records

BibTeX

@misc{mwsysarc_lifo_inventory_accounting_2026,
  author = {{MW SysArc}},
  title = {LIFO Inventory Calculator},
  howpublished = {MW SysArc Tools},
  year = {2026},
  url = {https://accounting.mwsysarc.com/lifo-inventory-calculator},
  note = {Published July 21, 2026; accessed August 26, 2026}
}

RIS

TY  - ELEC
AU  - MW SysArc
TI  - LIFO Inventory Calculator
T2  - MW SysArc Tools
PY  - 2026
DA  - 2026-07-21
Y2  - 2026-08-26
UR  - https://accounting.mwsysarc.com/lifo-inventory-calculator
N1  - Published July 21, 2026
ER  -

Clear answers

Frequently asked questions

What does the LIFO inventory do?

Calculate cost of goods sold and ending inventory for two purchase layers using last-in, first-out.

How does the LIFO inventory work?

The calculator applies LIFO assigns the newest available unit costs to goods sold first. LIFO leaves older costs in ending inventory. LIFO is not permitted under every reporting framework, so verify the applicable accounting rules.

What can I learn from the LIFO inventory?

You will connect Older layer units, Older unit cost, Newer layer units, Newer unit cost, Units sold to LIFO cost of goods sold, then see how the relationship belongs in the accounting process.

Does MW SysArc receive or store what I enter?

No. The calculation runs locally in your browser. MW SysArc does not receive or store your calculation inputs.

How should I use the result?

Use the result as an educational or reconciliation reference. Confirm the reporting period, accounting policy and source records before relying on it.

Last reviewed . Calculations tested .

MW SysArc Certified