IN-L-H  Edit FIFO/LIFO Buckets

Purpose of Program

Use this program to make changes to the receipt date or cost on your FIFO or LIFO cost buckets.

You cannot change quantities within the buckets through this program; otherwise you could accidentally create a discrepancy between the on-hand quantities in your inventory Locations and those of your FIFO or LIFO cost buckets (FIFO and LIFO cost buckets are company wide and are not maintained by Location).  Instead, use SM-J-C  Reconcile Inventory On-Hand to balance out any quantity discrepancies, or use IN-C  Enter Inventory Adjustments or IN-K  Adjust Physical Levels if you wish to make quantity adjustments.

How FIFO Costing Works

With FIFO costing each time inventory is received, a cost bucket gets created that contains the receipt date, the quantity, and the cost.  Whenever inventory is deducted, it is first deducted from the oldest cost bucket, then the next oldest, etc.  When a bucket gets fully depleted, it is deleted.  There is no limit to the number of cost buckets that can be created.  Each time an inventory transaction occurs, the Average Cost in the inventory master file is updated by the following formula: each cost bucket's quantity is multiplied by its cost, then these extended costs are added together and divided by the total on-hand quantity.

How LIFO Costing Works

With LIFO costing each time inventory is received, a cost bucket gets created that contains the receipt date, the quantity, and the cost.  Whenever inventory is deducted, it is first deducted from the most recent cost bucket, then the next recent, etc.  When a bucket gets fully depleted, it is deleted.  There is no limit to the number of cost buckets that can be created.  Each time an inventory transaction occurs, the Average Cost in the inventory master file is updated by the following formula: each cost bucket's quantity is multiplied by its cost, then these extended costs are added together and divided by the total on-hand quantity.

General Program Operation

Enter the Item number of the item to be edited, or select one from a pop-up window by pressing the F2 key (or clicking on the Lookup button).  The Average Cost, Total Quantity (total company wide on-hand quantity), and Last Cost fields are displayed for reference only.

The existing FIFO/LIFO buckets are listed in a display window.  Highlight and press <Enter> or click on the bucket you wish to change.  A window then pops up that allows you to change the bucket's cost.  As you make the change the Average Cost field at the top of the screen will be recalculated; however, it does not actually change the Average Cost in the inventory master file until the screen is saved.

Continue selecting buckets and changing costs until you are finished making entries.  When you have completed your entries, press F10 (or click on the Save button).  You will be presented with a message indicating that the net value of your inventory account has increased or decreased.  If you accept the prompt, your General Ledger asset account for the item will be credited or debited accordingly.  If you don't accept the prompt, you can either choose to exit the program or you can return to the screen and make further changes.