What is a clean post?
Pure post is a number that helps identify the amount of the selling price of the item after all expenses have been deducted from income generated by the purchase of these goods to the consumer. By deducting all expenditures associated with good or service from all sources of income related to this product, it is possible to determine how many benefits or contributions that bring these expenses to generate profits for business. This particular calculation provides a rapid image of how well the product line is doing in terms of generating a decent profit range, and can serve as a basis for finding ways to improve this net profit.
The basic formula of a net post is very simple. The first step is to identify all expenditures associated with the creation and sale of the product. Once this sum has been determined, it is necessary to identify all sources of income associated with the product. Receipt deduction from income results in identifying whether any profit was generated. Positive cleanThe contribution means that the company actually covered all expenses and made at least a certain profit. At the same time, a negative clean contribution means that the company produces goods more than income that has been made of effort, a situation that requires immediate attention.
One way to understand the concept of net contribution is to consider a situation where the company adds a sales campaign for a new product, with a campaign worth $ 500,000 in the US. The campaign turns out to be successful and generates income of $ 750,000 USD in the ways of selling a targeted product. As a result, a net contribution of this added expenditure was another $ 250,000 for the company.
Calculation of a net contribution may include focus on a specific project or product, or is related to the total cost of the company that produces several different products at the same time. In any incarnation is the ideaIdentify any remaining amounts of income available to the company after production and other expenses are settled. Monitoring the movement of a net contribution from one accounting period to the next can help the company monitor its own growth formula, both in terms of positive and negative growth. The results of the net allowance calculation help to set the soil to make changes in the production process and marketing and other factors so that the company can enjoy a larger profit range in later periods.