The document describes inventory transactions using the FIFO costing method. It shows receipts of item A into inventory from three purchase orders at costs of $10, $11, and $12 per unit. It also shows one shipment of 8 units from inventory. Under FIFO, the 7 units from the first receipt at $10 are shipped first, then the remaining 1 unit from the second receipt at $11. The valuation structure considers the cost organization, inventory organization, and lot.

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Actual Cost (FIFO) – click to advance slide
Inventory Transaction
Cost Inv
Item Transaction Org Org Lot Quantity
A PO Receipt1 OrgA OrgA 1 7
A PO Receipt2 OrgA OrgA 1 8
A PO Receipt3 OrgA OrgA 2 9
A SO Shipment1 OrgA OrgA 2 8
Receipt Cost (based on PO)
Item Transaction Unit Cost
A PO Receipt1 $10
A PO Receipt2 $11
A PO Receipt3 $12
What is the item’s Valuation Structure?
Cost Org + Inventory Org
Inventory Valuation Units
Org A + Org A
PO Receipt1 +7
7 @ $10
PO Receipt2 +8
PO Receipt3 +9 8 @ $11
9 @ $12
Inventory Account
Shipments
SO Shipment1 -8
-7
-1
COGS
7 @ $10
1 @ $11
7 @ $10
1 @ $11

2. Copyright © 2015, Oracle and/or its affiliates. All rights reserved. |
Actual Cost (FIFO) – click to advance slide
Inventory Transaction
Cost Inv
Item Transaction Org Org Lot Quantity
A PO Receipt1 OrgA OrgA 1 7
A PO Receipt2 OrgA OrgA 1 8
A PO Receipt3 OrgA OrgA 2 9
A SO Shipment1 OrgA OrgA 2 8
Receipt Cost (based on PO)
Item Transaction Unit Cost
A PO Receipt1 $10
A PO Receipt2 $11
A PO Receipt3 $12
What is the item’s Valuation Structure?
Cost Org + Inventory Org + Lot
Inventory Valuation Units
Org A + Org A + Lot1
PO Receipt1 +7
7 @ $10
PO Receipt2 +8
PO Receipt3 +9 8 @ $11
9 @ $12
Inventory Account
Shipments
SO Shipment1 -8
-8
COGS
8 @ $12
8 @ $12
Org A + Org A + Lot2