Which of the Following Statements Is True of Benchmarking

question 107

Multiple Choice

Which of the following statements is true of benchmarking?

• A) It is a systematic approach of optimizing business processes.
• B) It fails to help to improve organizational performance as benchmarking data does not provide insight into why costs or revenues differ across companies.
• C) It is difficult to ensure that the benchmark numbers are comparable due to the existence of differences across companies.
• D) It considers four major business aspects such as financial, customer, internal business processes, and learning and growth.

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Definitions:

Indirect Manufacturing Costs

These are costs that cannot be directly traced to specific units produced, such as maintenance and cleaning, and are part of the manufacturing overhead.

Incremental Manufacturing Cost

Refers to the additional cost incurred for producing one more unit of a product.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is available to cover fixed costs and generate profit.

Direct Manufacturing Cost

The sum of all the costs directly associated with the production of a good, including raw materials and direct labor.