What is the difference between period costs and product costs?
Product costs are costs that go into making a product or service and would include direct material, direct labor, manufacturing overhead, etc. Product costs are capitalized into inventory and expensed when the units are sold. Period costs are unrelated to producing a product and are expensed in the period they are incurred. Examples of period costs include marketing expenses, salaries for the executive team, accounting and legal costs, etc.
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How can variable sampling risk impact the efficiency or effectiveness of an audit?
Audit risk is comprised of inherent risk, control risk, and detection risk. The level of substantive testing that the audit performs is based on detection risk, which is set after the audit team assesses inherent risk and control risk. Variable Sampling – Substantive Testing When the audit team is performing substantive testing, they will use […]
What happens if control risk is set too high or too low?
Audit risk is comprised of inherent risk, control risk, and detection risk. Depending on how the audit team assesses control risk, they would set detection risk, which determines the level of substantive testing that should be performed. To assess control risk, the audit team would use attribute sampling to determine if the controls were operating […]
What is business intelligence?
In general, business intelligence is the strategy and technology used by a company to analyze their data. There are a number of difference functions that fall under the business intelligence umbrella. These include analytics, data mining, processing mining, use of dashboards, etc. The biggest problem most companies face is that they have a ton, and […]