Enter the beginning inventory purchases ($) and the ending inventory value ($) into the Inventory Cost Calculator. The calculator will evaluate and display the Inventory Cost.

- All Cost Calculators
- Inventory Turnover Ratio Calculator
- Percentage of Cost Calculator
- Ending Inventory Calculator

## Inventory Cost Formula

The following formula is used to calculate the Inventory Cost.

IC = BIP - EIV

- Where IC is the Inventory Cost ($)
- BIP is the beginning inventory purchases ($)
- EIV is the ending inventory value ($)

To calculate the inventory cost, subtract the engine inventory value from the beginning inventory purchases.

## How to Calculate Inventory Cost?

The following example problems outline how to calculate Inventory Cost.

Example Problem #1:

- First, determine the beginning inventory purchases ($). The beginning inventory purchases ($) is given as 500.
- Next, determine the ending inventory value ($). The ending inventory value ($) is provided as 300.
- Finally, calculate the Inventory Cost using the equation above:

IC = BIP – EIV

The values given above are inserted into the equation below:

IC = 500 – 300 = 200 ($)

Example Problem #2:** **

The variables needed for this problem are provided below:

beginning inventory purchases ($) = 7000

ending inventory value ($) = 2000

Entering these values and solving gives:

IC = BIP – EIV = 5000.00 ($)