Which of the Following Is TRUE of Benchmarking

question 202

Multiple Choice

Which of the following is TRUE of benchmarking?

• A)It is an analysis in which a firm's ratio values are analyzed to project the fundamental values of the assets for upcoming years or business cycle.
• B)It is an analysis in which a firm's ratio values are compared with those of a key competitor or with a group of competitors that it wishes to emulate.
• C)It is an analysis in which a firm's financial performance over time is evaluated using financial ratio analysis.
• D)It is a financial statement analysis technique which is primarily used for forecasting future performance.

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Definitions:

Support Department Allocations

The process of attributing a portion of support (or indirect) department costs to the producing departments within an organization, based on agreed-upon criteria.

Cost Driver

A factor that causes a change in the cost of an activity; it directly impacts the cost of manufacturing goods or delivering services.

Reciprocal Services Method

An approach to allocating costs between departments that provide mutual services to each other, ensuring a fair distribution based on services rendered.

Algebraic Expression

A mathematical phrase that can contain ordinary numbers, variables, and operators, but no equal sign.