A present differences in the benchmarking data to

A) present differences in the benchmarking data to management
B) highlight differences in the benchmarking data to management
C) provide insight into why costs or revenues differ across companies
D) provide complex mathematical analysis
Answer: C
Diff: 2
Objective: 7
AACSB: Analytical thinking
5) Benchmarking is the continuous process of measuring products, services, and activities
against the best possible levels of performance, either inside or outside the organization.
Answer: TRUE
Diff: 1
Objective: 7
AACSB: Analytical thinking
6) Coast to Coast Bus Lines acquired the following data about the operating cost of three of
its top competitors.

Operating cost per seat per mile
Competitor A $.11
Competitor B $.15
Competitor C $.16
Management decides to use the average operating cost per seat per mile as a mark. Coast
to Coast per seat is 12.5 cents per mile.
A) It is equal to the mark
B) It compares favorably
C) It compares unfavorably
D) It compares favorably to the best performing competitor
Answer: B
Diff: 2
Objective: 7
AACSB: Analytical thinking
7) It is difficult for firms to find appropriate benchmarks because differences can exist
across companies in their strategies, inventory costing methods, depreciation methods, and
so on.
Answer: TRUE
Diff: 2
Objective: 7
AACSB: Analytical thinking
8) When benchmarking it is best when management accountants simply analyze the costs
and allow management to provide the insight as to why the revenues and costs differ
between companies.
Answer: FALSE
Explanation: When benchmarking, management accountants are more valuable when they
analyze the costs and also provide management with insight as to why the revenues and
costs differ between companies.
Diff: 1
Objective: 7
AACSB: Analytical thinking

9) What is benchmarking, and how is it useful to a company?
Answer: Benchmarking is the continuous process of comparing the levels of performance
in producing products and services and executing activities against the best levels of
performance in competing companies or in companies having similar processes. Companies
can examine aspects of their own operations in comparison to similar operations and see if
they are operating at a disadvantage. Benchmarking might provide targets and
opportunities to cut costs, and might even show where they have a competitive advantage
over similar companies.
Diff: 2
Objective: 7
AACSB: Analytical thinking