CCA CCA Financial Management & Budgeting 1

Question 1

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

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting starts from a zero base and requires every expense to be justified for each new budget period.

Question 2

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

Accepted Answer

Total food revenue

Answer

Food cost percentage = (cost of food sold ÷ total food revenue) × 100.

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

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, reflecting core operational profitability.

Question 4

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

Accepted Answer

Total revenue equals total costs

Answer

Break-even occurs when total revenue exactly equals total costs, resulting in neither profit nor loss.

Question 5

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

Accepted Answer

Fixed cost

Answer

Fixed costs such as rent and salaried wages do not change with the volume of meals produced.

(CCA) Certified Culinary Administrator Practice Test