In Regards to Benchmarking,which of the Following Statements Is Incorrect

question 96

Multiple Choice

In regards to benchmarking,which of the following statements is incorrect?

• A) Benchmarking is the practice of comparing a company with other leading companies.
• B) The industry average is not a useful benchmark for evaluating a company.
• C) Providing common-size percentages in a graphical manner highlights differences.
• D) The two main types of benchmarks in financial statement analysis include benchmarking against the industry average and benchmarking against a key competitor.

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Definitions:

Direct Labor Cost

The total cost of workforce expenses directly involved in the manufacturing of products or delivery of services, excluding indirect labor costs.

Absorption Costing

A costing methodology in accounting that factors in all costs associated with manufacturing, such as direct materials, direct labor, along with both variable and fixed overheads, into the product's cost.

Unit Product Cost

Unit product cost is the total cost to produce one unit of product, calculated by dividing total production costs by the number of units produced.

Direct Labor Cost

The total amount of money a company spends on wages for employees who are directly involved in the manufacturing of products or providing services.