CCEP Budget Management 2

Question 1

Which budgeting method builds the budget from zero each cycle, requiring justification for every line item?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting starts from scratch each period, requiring all expenditures to be justified rather than simply adjusting prior-year figures.

Question 2

An event planner discovers mid-event that AV costs will exceed budget by 15%. What is the BEST immediate action?

Accepted Answer

Identify offsetting savings in other budget lines

Answer

Identifying offsetting savings elsewhere maintains overall budget integrity without disrupting the event experience.

Question 3

What does the term 'attrition clause' refer to in event budgeting?

Accepted Answer

A financial penalty for not meeting a minimum contracted room or F&B commitment

Answer

Attrition clauses require organizers to pay a penalty if actual consumption falls below a guaranteed minimum in hotel or F&B contracts.

Question 4

Which expense category is typically classified as a variable cost in event budgeting?

Accepted Answer

Per-person catering costs

Answer

Per-person catering costs fluctuate directly with attendance numbers, making them a classic variable cost.

Question 5

A planner uses a 'should-cost' analysis before negotiating with vendors. What is the primary purpose?

Accepted Answer

To establish an internal benchmark for what a service should reasonably cost

Answer

Should-cost analysis helps planners understand fair market pricing, giving them a benchmark to identify overpriced vendor proposals.

(CCEP) Certified Conference and Events Professional Practice Test