Net income clipart

Mar 04 2020

Net profit is a measure of the fundamental profitability of the venture. “It is the revenues of the activity less the costs of the activity. The main complication is . . . when needs to be allocated” across ventures. “Almost by definition, overheads are costs that cannot be directly tied to any specific” project, product, or division. “The classic example would be the cost of headquarters staff. ” “Although it is theoretically possible to calculate profits for any sub-(venture), such as a product or region, often the calculations are rendered suspect by the need to allocate overhead costs. ” Because overhead costs generally don’t come in neat packages, their allocation across ventures is not an exact science.