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 (\$)