The Cost of Sales (COS) is a crucial metric for understanding the direct costs attributable to the production of the goods sold by your business. This calculator will help you easily compute your COS by factoring in your inventory levels and purchases.

## Using the Cost of Sales Calculator

1. Enter the beginning inventory amount in dollars.

2. Input the total purchases made during the period.

3. Fill in the ending inventory amount.

4. Click 'Calculate Cost of Sales' to see your results.

### Cost of Sales Formula

The formula for calculating the Cost of Sales is as follows:

**Cost of Sales = Beginning Inventory + Purchases - Ending Inventory**

### Example Calculation

If your beginning inventory is $10,000, total purchases are $5,000, and your ending inventory is $7,000, the calculation would be:

**Cost of Sales = $10,000 + $5,000 - $7,000 = $8,000**

### Why Knowing Your Cost of Sales Matters

Understanding your cost of sales is essential for effective pricing and profitability analysis. It allows businesses to manage their inventory efficiently and assess their gross margin accurately.