Net Purchase Cost Formula

Net purchases is the gross purchases (all purchases and freight-in, or shipping) cost minus the purchase discounts, purchase returns and allowances. But, note that storage costs, insurance, interest and other similar costs are considered to be period costs that are not attached to the product, and instead these costs are termed as operating expenses. This page provides you a net purchase cost formula from which it helps you to calculate net purchase price.

Formula:

Net Purchase Price = p - (d + a)


Where,

p = Amount of Total Purchases
d = Purchase Discounts
a = Purchase Returns & Allowance

Related Calculator:

You can find the net purchase amount based on the above net purchase cost formula which reflects the actual cost that were deemed to be ordinary and necessary to bring the goods to their location for resale to an end customer.


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