Q:

What does "net cost" mean?

A:

The net cost of a good or service is the total cost of the product minus any benefits gained by purchasing that product, according to AccountingTools. It differs from the gross cost, which is just the total cost of a product.

Calculations of net cost or net price are commonly used by universities to help students and parents understand the costs of attendance, according to U.S. News and World Report. In this context, net cost is calculated by subtracting any grants received from the total tuition to determine the actual cost of attendance that the student must pay. The U.S. government also uses net cost calculations to evaluate budgets, according to the Bureau of the Fiscal Services.

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