Which of the Following Is an Example of the Benchmarking

question 169

Multiple Choice

Which of the following is an example of the benchmarking function of the budgeting process?

• A) A budget demands integrated input from different business units and functions.
• B) Budgeting requires close cooperation between accountants and operational personnel.
• C) Budget figures are used to evaluate the performance of managers.
• D) The budget outlines a specific course of action for the coming period.

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Definitions:

Period Cost

Expenses that are incurred in a specific accounting period but not directly tied to the production process, such as administrative and selling expenses.

Direct Cost

Expenses that can be directly traced to the production of specific goods or services, such as raw materials and labor.

Indirect Cost

Costs associated with operations that cannot be directly linked to a specific product, service, or project (e.g., utilities, rent, and managerial salaries).

Period Cost

Expenses not directly tied to the production of goods, thereby charged to the accounting period in which they occur.