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.Learn More
The activity-based costing system is far more accurate in determining the cost of a product due to the inclusion of all needed equipment and labor necessary for producing the product. While the traditional accounting system is often used, it has significant weaknesses when figuring total costs.Full Answer >
The term "net price" refers to the cost of something minus the price of anything that lowers the total dollar value a consumer actually pays, according to U.S. News & World Report. The term is most commonly used by colleges and universities.Full Answer >
The Value Added Tax can be calculated from the total cost of an item by multiplying the total cost by the VAT fraction, according to HM Revenue & Customs. In the reverse, the formula to calculate the VAT of an item when only given the base price and the VAT rate is the base price times the percentage rate of the VAT.Full Answer >
Net turnover is a value that takes on different meanings across business processes, but it generally refers to a figure measuring the arrival of new employees or total sale volume. According to Jonathan Lister for the Houston Chronicle, net turnover can help business owners identify and correct problems in an organization while providing information regarding the company's success on the open market.Full Answer >