How is COGS calculated?

The following formula is used to calculate COGS:

COGS = Opening Inventory + Additional Purchases during the period – Closing Inventory

Suppose company QPR reported an opening inventory of $15,000 at the start of the year. During this period, they bought other goods worth $5000. As the year ended, their closing inventory was $6000. Therefore, the COGS will be $14,000 in this scenario. Additionally, you can record the level of goods sold using three ways: The Average Cost Method, FIFO, and LIFO.