Instead of comparing the total cost of Kim's proposed Midtown nail salon to her proposed Uptown nail salon, which of the following methods should be used to make a better comparison?
A) break-even analysis
B) center of gravity method
C) fixed costs
D) variable costs

Question

Quizplus · Accepted Answer

Break-even analysis allows for a comparison of the profitability of two different projects by taking into account the revenue and cost structure of each project. This method helps to determine a point at which both projects will break even, or generate enough revenue to cover their costs. Therefore, by using this method, a better comparison can be made between Kim's proposed Midtown and Uptown nail salon. The center of gravity method, fixed costs, and variable costs do not provide a meaningful comparison between the two projects.

Instead of Comparing the Total Cost of Kim's Proposed Midtown