Benchmarks Are Required to Evaluate a Company's Performance

question 82

True/False

Benchmarks are required to evaluate a company's performance.Benchmarks are necessary when interpreting a company's financial ratios.These benchmarks may be the company's own results for prior years,the results of competitors,or an average for the industry.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or service provision, such as materials and labor.

Break-Even Analysis

A financial calculation to determine the sales volume at which total revenues equal total costs, resulting in no profit or loss.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent or salaries.

Variable Cost

Expenses that vary proportionally with the level of production or service output, such as materials or labor costs.