Benchmarking Is Often Done by Comparing a Company Against Either

question 102

True/False

Benchmarking is often done by comparing a company against either a key competitor or against the industry average.

---

Definitions:

Allocated General Overhead

The distribution of overhead costs, such as electricity, rent, and administrative salaries, to various departments or production processes based on a predetermined formula.

Differential Cost

Differential cost, or incremental cost, is the difference in total cost that will result from selecting one option over another in decision-making.

Relevant Costs

Relevant costs are those costs that should be considered when making decisions. They are directly affected by the decision in question and can include future costs that will differ among alternatives.

Fixed Manufacturing Expenses

Costs that do not vary with the volume of production, such as rent, depreciation of manufacturing equipment, and salaries of permanent factory staff.