FIFO vs Weighted Average Calculator
Same purchases, same sales, same units — but the costing method you choose changes how much of that cost lands in this period’s profit versus next period’s closing stock.
FIFO vs Weighted Average calculator
The same chronological transactions, costed two different ways — edit the quantities and rates and watch both methods recalculate independently.
| # | Type | Quantity | Rate (₹), purchases only |
|---|---|---|---|
| 1 | |||
| 2 | |||
| 3 | — | ||
| 4 | |||
| 5 | — | ||
| 6 | — |
| Method | COGS | Closing qty | Closing value |
|---|---|---|---|
| FIFO | ₹66,800 | 20 | ₹4,600 |
| Weighted Average | ₹67,023 | 20 | ₹4,377 |
| Difference (WAC − FIFO) | ₹223 | — | ₹-223 |
Educational illustration only. This assumes stock is never oversold at any point in the sequence — if your own edited transactions attempt to sell more than is on hand, the figures above will no longer reconcile.
FIFO: oldest cost out first
First-In-First-Out assumes the earliest purchased units are the first ones sold. Each purchase forms a cost “layer,” and sales deplete the oldest layer before touching a newer one. In a period of rising prices, FIFO tends to show a lower Cost of Goods Sold and a higher closing stock value, since the oldest, cheaper costs are expensed first.
Weighted average: one blended rate
The perpetual (moving) weighted average method recalculates a single blended cost per unit every time new stock is purchased, and uses that rate for every sale until the next purchase changes it again. It smooths out price swings rather than tracking individual purchase batches.
Educational illustration only. This calculator assumes stock is never oversold at any point in the sequence you enter — real inventory systems enforce that constraint transaction by transaction.
See the full layer-by-layer workings in Excel
This exact comparison, taught step by step in Advanced Excel for Finance & Business.