CCA CCA Financial Management & Budgeting

Question 1

Which budgeting method builds a new budget from zero each period, requiring justification for every expense?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Activity-based budgeting

Answer

Cash-flow budgeting

Question 2

Food cost percentage is calculated by dividing cost of food sold by:

Accepted Answer

Total food revenue

Answer

Total labor costs

Answer

Total operating expenses

Answer

Number of covers served

Question 3

A CCA reviewing a P&L statement notices EBITDA. What does EBITDA measure?

Accepted Answer

Earnings before interest, taxes, depreciation, and amortization

Answer

Estimated budget including tax deductions and adjustments

Answer

Employee benefits, insurance, training, and departmental allowances

Answer

End-of-period balance in tax, depreciation, and accrual accounts

Question 4

The break-even point for a foodservice operation is where:

Accepted Answer

Total revenue equals total costs

Answer

Profit equals 10% of revenue

Answer

Fixed costs are paid off

Answer

Variable costs drop below budget

Question 5

Which cost type remains constant regardless of the volume of meals produced?

Accepted Answer

Fixed cost

Answer

Variable cost

Answer

Semi-variable cost

Answer

Marginal cost

Question 6

A contribution margin is best defined as:

Accepted Answer

Selling price minus variable cost per unit

Answer

Gross profit minus overhead

Answer

Total revenue minus fixed costs

Answer

Net income after taxes