What is the formula of cost of goods sold?

Asked 4 years ago

Hi, I want to calculate COGS but I don't know how. Can someone please explain the formula to me, and give me an example?

Cost of goods sold (cogs)Cost calculation Expenses

Kobe Baker

Thursday, November 11, 2021

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This is the formula to calculate the cost of goods sold: (opening inventory + purchases - closing inventory)
Here's an example of calculating the COGS. A company's previous inventory is $2000 while its purchases were $30,000 and its closing inventory is $5000. What are the COGS? 
(2000+30000-5000)= $27,000

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What is the formula of cost of goods sold?

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