Budget Management Flashcards
7 cards from real CCEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Budget Management flashcards as text
Which budgeting method builds the budget from zero each cycle, requiring justification for every line item?
Answer: Zero-based budgeting
Zero-based budgeting starts from scratch each period, requiring all expenditures to be justified rather than simply adjusting prior-year figures.
An event planner discovers mid-event that AV costs will exceed budget by 15%. What is the BEST immediate action?
Answer: Identify offsetting savings in other budget lines
Identifying offsetting savings elsewhere maintains overall budget integrity without disrupting the event experience.
What does the term 'attrition clause' refer to in event budgeting?
Answer: A financial penalty for not meeting a minimum contracted room or F&B commitment
Attrition clauses require organizers to pay a penalty if actual consumption falls below a guaranteed minimum in hotel or F&B contracts.
Which expense category is typically classified as a variable cost in event budgeting?
Answer: Per-person catering costs
Per-person catering costs fluctuate directly with attendance numbers, making them a classic variable cost.
A planner uses a 'should-cost' analysis before negotiating with vendors. What is the primary purpose?
Answer: To establish an internal benchmark for what a service should reasonably cost
Should-cost analysis helps planners understand fair market pricing, giving them a benchmark to identify overpriced vendor proposals.
When preparing a multi-year event budget forecast, which factor is MOST critical to include?
Answer: Projected inflation rates and cost escalation clauses
Inflation rates and escalation clauses in multi-year contracts directly affect future budget accuracy and financial planning.
A planner receives a sponsorship payment after the event's accounting period closes. How should this be handled in the budget?
Answer: Carry it forward as deferred revenue in the next accounting period
Revenue received after the accounting period closes is recorded as deferred revenue following standard accrual accounting principles.