CBS Expense Management & Cost Control 3

Question 1

A budget specialist is reviewing travel expenses and finds that actual spend is 30% above budget. Which immediate action is most appropriate?

Accepted Answer

Conduct a variance investigation to identify root causes

Answer

Investigating root causes of material variances enables informed corrective action rather than arbitrary reactions.

Question 2

Which of the following is an example of a committed cost?

Accepted Answer

Lease payments on a 5-year facility contract

Answer

Committed costs arise from long-term contractual obligations and cannot be easily avoided in the short term.

Question 3

Cost benchmarking compares an organization's expenses to:

Accepted Answer

Industry peers or best-in-class performers

Answer

Benchmarking uses external comparisons to industry peers or best-practice organizations to identify cost improvement opportunities.

Question 4

An organization implements a policy requiring three competitive bids for any purchase over $10,000. This is primarily a control over:

Accepted Answer

Procurement costs

Answer

Competitive bidding requirements are procurement controls designed to ensure costs are market-competitive and prevent overpaying.

Question 5

Which ratio is most useful for monitoring whether administrative expenses are growing faster than revenue?

Accepted Answer

SG&A as a percentage of revenue

Answer

SG&A (Selling, General & Administrative) as a percentage of revenue tracks the efficiency of administrative cost management relative to top-line growth.

(CBS) Certified Budget Specialist Practice Test

(CBS) Certified Budget Specialist Practice Test

CBS Expense Management & Cost Control 3