Quick answer
Cost of goods sold = beginning inventory + purchases − ending inventory. $20,000 + $85,000 − $18,000 = $87,000.
Enter beginning inventory, purchases and ending inventory. The calculator returns COGS for the period.
Related tools: Marginal Cost Calculator: Extra cost of producing additional units. Opportunity Cost Calculator: Value given up by choosing one option over another. Meeting Cost Calculator: Cost of a meeting from attendees and hourly cost.
How to use the Cost of Goods Sold Calculator
- Enter beginning inventory ($) (0 or more).
- Enter purchases ($) (0 or more).
- Enter ending inventory ($) (0 or more).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Beginning inventory | A number, in $ | ≥ 0 |
| Purchases | A number, in $ | ≥ 0 |
| Ending inventory | A number, in $ | ≥ 0 |
Formula and method
Formula
COGS = beginning inventory + purchases − ending inventory
IEEE-754 double precision; shown to the decimals indicated.
Periodic inventory method.
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Beginning inventory = 20000; Purchases = 85000; Ending inventory = 18000.
| Result | Value |
|---|---|
| COGS | $87,000.00 |
Example 2
Inputs: Beginning inventory = 0; Purchases = 5000; Ending inventory = 1200.
| Result | Value |
|---|---|
| COGS | $3,800.00 |
The first line is the headline result (cOGS). IEEE-754 double precision; shown to the decimals indicated.
The logic
Beginning inventory plus purchases is the stock available to sell, $105,000 here. What is left at the end of the period, $18,000, was not sold, so the rest, $87,000, was. COGS is subtracted from revenue to give gross profit.
What it leaves out
Direct labour and manufacturing overhead are part of COGS for manufacturers but are not inputs here. Inventory valuation (FIFO, LIFO or average cost) changes the inventory figures and therefore COGS. Ending inventory cannot exceed the goods available.
How the result changes with beginning inventory
Holding every other input at the first worked example, this table changes only beginning inventory. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Beginning inventory | COGS |
|---|---|
| 10000 | $77,000.00 |
| 20000 | $87,000.00 |
| 40000 | $107,000.00 |
| 80000 | $147,000.00 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Beginning inventory: entering "-1" shows "Beginning inventory must be at least 0." beside that field and no result.
- Ending inventory: entering "5" shows "Ending inventory cannot exceed beginning inventory plus purchases." beside that field and no result.
Choosing between the Cost of Goods Sold Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Marginal Cost Calculator](/business/marginal-cost/) | total cost before, total cost after and quantity before | Marginal cost |
| [Opportunity Cost Calculator](/business/opportunity-cost/) | return of the option you gave up and return of the option you chose | Opportunity cost |
| [Meeting Cost Calculator](/business/meeting-cost-calculator/) | attendees, average cost per person per hour and duration | Meeting cost |
| [Payroll Cost Calculator](/business/payroll-cost-calculator/) | employees, average annual salary and taxes and benefits on top of salary | Annual payroll cost |
| [Cost Per Acquisition Calculator](/business/cost-per-acquisition-calculator/) | marketing and sales spend and new customers or conversions | Cost per acquisition |
Background: business metrics
Business ratios depend on exactly which costs and revenues you include, so read each page's definition. Two common checks: break-even units = fixed costs ÷ (price − variable cost per unit), so $50,000 of fixed costs with a $10 price and $5 variable cost breaks even at 10,000 units; and net profit margin = net profit ÷ revenue, so $20,000 profit on $100,000 revenue is 20%.
Return on investment ignores time: 20% over five years is far less impressive than 20% in one, so compare returns over the same period.
Assumptions and limitations
- Ending inventory cannot exceed what was available
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for beginning inventory and ending inventory to confirm this.
Frequently asked questions
Is COGS an expense?
Yes, it is deducted from revenue on the income statement.
Does it include marketing?
No, only costs directly tied to goods sold.
How does it relate to gross margin?
Gross profit is revenue minus COGS.
What does the Cost of Goods Sold Calculator calculate?
COGS from inventory and purchases. It returns COGS.
What formula does the Cost of Goods Sold Calculator use?
COGS = beginning inventory + purchases − ending inventory. Periodic inventory method.
What do I need to enter in the cost of Goods Sold Calculator?
You enter Beginning inventory ($), Purchases ($) and Ending inventory ($).
How is the result rounded or limited?
IEEE-754 double precision; shown to the decimals indicated. Ending inventory cannot exceed what was available.
What is an example of a cost of Goods Sold result?
With beginning inventory 20000, purchases 85000 and ending inventory 18000, the cOGS is $87,000.00.
Where does the method come from?
The method follows: OpenStax, Principles of Accounting, Volume 1: Financial Accounting (Rice University).
Related calculators
- Marginal Cost Calculator — Extra cost of producing additional units.
- Opportunity Cost Calculator — Value given up by choosing one option over another.
- Meeting Cost Calculator — Cost of a meeting from attendees and hourly cost.
- Payroll Cost Calculator — Total payroll cost with a payroll burden you enter.
- Cost Per Acquisition Calculator — Cost of acquiring one customer or conversion.
- Cost Per Click Calculator — Average cost of each ad click.
Sources
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (Rice University)
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.