What is the best way to validate costs?
A) Validating costs is not necessary.
B) Adjust your business model.
C) Ask your customers.
D) Compare your balance sheet with your competitors' balance sheets.
E) Compare your common-sized income statement with the industry averages or some benchmark companies.

Question

Quizplus · Accepted Answer

Comparing your common-sized income statement with industry averages or benchmark companies allows you to see how your costs stack up against the norm in your industry. This method provides a clear, standardized way to assess whether your costs are in line, too high, or perhaps even lower than average, offering a solid basis for validation.

What Is the Best Way to Validate Costs