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. 

  • 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:

  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: 


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 ($)