For benchmarking purposes,it is best to use budgeted capacity because all competitors use about the same capacity for production.

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Benchmarking should be done using actual capacity rather than budgeted capacity because actual capacity reflects the true potential of a company's production ability. Budgeted capacity is just an estimate of what a company thinks it can produce and may not reflect actual production capability. Additionally, competitors may have different levels of actual capacity, making it difficult to compare using budgeted capacity.

For Benchmarking Purposes,it Is Best to Use Budgeted Capacity Because