Which of the Following Comments Best Describes the Appropriate Application

question 38

Multiple Choice

Which of the following comments best describes the appropriate application of benchmarking to a medium-sized Australian company with a range of products and services specifically designed for local conditions and demands?

• A) In the absence of a valid basis for comparison, benchmarking is unlikely to be informative in this case.
• B) Benchmarking should be based on world best practice for the nearest equivalent organisation.
• C) Efforts should be made to compare particular activities and processes with similar processes elsewhere, allowing for differences in the business environment.
• D) The use of benchmarking may inhibit originality in meeting the special features and unique needs of the firm's market.

---

Definitions:

Allocation Basis

A criterion or method used to allocate or distribute costs among different departments, products, or activities based on certain factors or proportions.

Overhead Costs

Overhead costs are the indirect expenses associated with running a business that are not directly tied to a specific product or service, including utilities, rent, and management salaries.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant to allocate overhead costs to production activities.

Machine Hours

A measure of production time, calculated as the total number of hours machines are operated in the production process.