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

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 ($) 

How to Calculate Inventory Cost?

The following example problems outline how to calculate Inventory Cost.

Example Problem #1:

  1. First, determine the beginning inventory purchases ($). The beginning inventory purchases ($) is given as 500.
  2. Next, determine the ending inventory value ($). The ending inventory value ($) is provided as 300.
  3. 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 ($)