CDM Financial Management and Budgeting 3

Question 1

What is the primary purpose of conducting a cost-benefit analysis before purchasing new kitchen equipment?

Accepted Answer

To compare the expected financial gains against the total investment cost

Answer

To determine the equipment's warranty period

Answer

To evaluate the equipment's color and design

Answer

To check if competitors use the same equipment

Question 2

Which metric measures the productivity of labor in a dietary department?

Accepted Answer

Meals per labor hour

Answer

Revenue per square foot

Answer

Food cost ratio

Answer

Overtime percentage

Question 3

A perpetual inventory system provides what advantage over a periodic inventory system?

Accepted Answer

Real-time tracking of stock levels

Answer

Lower initial setup cost

Answer

Elimination of physical counts

Answer

Reduced storage requirements

Question 4

When preparing a capital budget request for a new blast chiller, which factor is MOST important to include?

Accepted Answer

The projected return on investment and payback period

Answer

The brand popularity among other facilities

Answer

The color options available

Answer

The salesperson's recommendation

Question 5

What does the term 'prime cost' represent in foodservice financial management?

Accepted Answer

Combined food cost and labor cost

Answer

Food cost only

Answer

Labor cost only

Answer

Total operating expenses minus profit

Question 6

Which financial indicator measures an organization's ability to meet short-term obligations?

Accepted Answer

Current ratio

Answer

Profit margin

Answer

Debt-to-equity ratio

Answer

Return on assets