Operations guide
How to use the cost of goods sold calculator
Worked example
Cost of goods sold: calculation example
$30,000 beginning inventory plus $70,000 net purchases minus $25,000 ending inventory gives $75,000 estimated cost of goods sold.
This merchandise estimate may need freight and inventory adjustments. Manufacturers also need production costs; check your accounting policy before using the result.
Common question
Understand the result
Are inventory purchases always the same as COGS?
No. Unsold inventory remains an asset. This simple merchandise estimate subtracts ending inventory from goods available for sale.