Activity-based costing uses benchmarking to compare the cost of an activity in one organization to the cost for a similar activity in another organization.

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The statements are incorrect. In activity-based management, resources used by major activities are identified first, and then ways to improve the effectiveness of those activities are determined. The process of identifying major activities follows this step. Benchmarking may be used at any point in the process to compare costs with similar activities in other organizations.

Activity-Based Costing Uses Benchmarking to Compare the Cost of an Activity