Difference Between Product Cost and Period Cost with Comparison Chart

by | Oct 27, 2021 | Bookkeeping

So, product costs become your pricing compass, guiding you to set prices that keep your bakery in business. So, as they don’t influence inventory valuation, period costs don’t create confusion about the value of unsold goods. “Period costs” or “period expenses” are costs charged to the expense account and are not linked to production or inventory. Costs and expenses that are capitalized, related to fixed assets, related to purchase of goods, or any other capitalized interest are not period costs. Since product costs are linked to a product, a company can report such costs in the category of cost of goods sold on the income statement. An understanding of period costs helps you analyze your financial statements. Period Cost vs Product Cost Instead, these expenses are attributed to selling and general administrative activities. Allocable but nontraceable costs to products and services—like our electricity example above—are called manufacturing overhead (MOH). We still include MOH as part of product costs even if we can’t trace them directly. Product and period costs are the two major classifications of costs that have different accounting treatments. Period Cost vs Product Expense Period costs are also listed as an expense in the accounting period in which they occur. Unlike period costs, product costs are tied to the production of a product. Some examples of what a product costs include, direct labor, raw materials, manufacturing supplies, and overhead that is directly tied to the production facility, such as electricity. Product costs are initially attached to product inventory and do not appear on income statement as expense until the product for which they have been incurred is sold and generates revenue...

What Is Mean Reversion Trading? Does It Work in Swing trading? Insights

by | Oct 18, 2021 | Forex Trading

Readings above 80 suggest that the asset might start declining toward the mean, while readings below 20 indicate a potential upward mean reversion. I used a standard deviation of only 1.5 on the 200day moving average in the above chart because it takes a significant move to get even that far away from such a long-term moving average of price. When we shorten our time frame down to the 50day average, however, we’ll need to increase our deviation from 1.5 to 2.0 to reduce the noise of false signals. Trend following is one strategy that relies on the opposite tendency to that of mean reversion. The purpose of mean reversion in finance is to understand and predict the tendency of asset prices and returns to move back towards their long-term mean or average. While mean reversion strategies tend to have quite many winners, trend following strategies tend to have few but big winners. Any move above or below the bands, therefore, signals an “abnormal” move beyond the standard deviation, hence an overextension that is likely to revert to the mean. When in a strong bull market, you obviously want to be looking for opportunities to go long, as that is where the easy money is. Intraday strategies deals with the buying and selling of multiple assets in the entirety of a single day and positions are usually not held overnight. Is RSI a mean reversion indicator? While a high-growth firm could outperform for years, most companies can’t sustain such elevated returns before new competitors drive their margins down, as I mentioned before. As investors, it’s essential to make educated...

10 Best Cryptocurrencies of August 2024

by | Oct 4, 2021 | Cryptocurrency exchange

Basically, if you want to use your digital currency frequently then you must use hot storage. On the other hand, if you want to store your money for a long time then you must use cold storage. The art of cryptocurrency trading is a vast topic in and of itself, and determining precisely when a crypto is in a bubble and when it has reached a local bottom after falling is not an exact science. What is easy to say in retrospect is a hard question to answer in the present. Sometimes a coin starts to rise, and after it passes a key line of historical resistance, and many believe it to be at the peak of a bubble, the real rally just begins. If you’ve been hearing about cryptocurrencies a lot these days, you may feel like it’s a good opportunity to make a quick profit. Top 10 Altcoins Of August 2024 There are thousands of cryptocurrencies valued at less than 1 cent in the market. Another robust platform is Crypto.com, which lets you can buy, sell, store, send, and track over 100 cryptocurrencies. This year, Canto and Blur made waves as some of the most promising new cryptocurrencies. If you’re looking to add some to your portfolio, it may be difficult to figure out how to get started. Unfortunately, scams regularly pop up on the market, so it’s important to scrutinize every project and rule out ones that show red flags regarding their credibility or trustworthiness. While there are thousands of cryptocurrencies being traded around the world, you’ll find that the most popular options are widely available for...