70. All of the following are true regarding benchmarking except A. benchmarking includes comparing one company with a key competitor B. if the industry average for gross profit is 35% and your company average is 40%, this would be considered favorable C. benchmarking includes comparing one company with the industry average D. if the industry average for cost of goods sold (COGS) is 50% and your company average is 60%, this would be considered favorable

70. All of the following are true regarding benchmarking except A. benchmarking includes comparing one company with a key competitor B. if the industry average for gross profit is 35% and your company average is 40%, this would be considered favorable C. benchmarking includes comparing one company with the industry average D. if the industry average for cost of goods sold (COGS) is 50% and your company average is 60%, this would be considered favorable

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.4E

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Suppose you are analyzing a firm that is successfully executing a strategy that differentiates its products from those of its competitors. Because of this strategy, you project that next year the firm will generate 6.0% revenue growth from price increases and 3.0% revenue growth from sales volume increases. Assume that the firms production cost structure involves strictly variable costs. (That is, the cost to produce each unit of product remains the same.) Should you project that the firms gross profit will increase next year? If you project that the gross profit will increase, is the increase a result of volume growth, price growth, or both? Should you project that the firms gross profit margin (gross profit divided by sales) will increase next year? If you project that the gross profit margin will increase, is the increase a result of volume growth, price growth, or both?
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