Practice Test GeeksCEC - Certified Executive Chef Practice Test
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Financial Management and Cost Control Flashcards

6 cards from real CEC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Financial Management and Cost Control flashcards as text

  1. Which financial statement shows a restaurant's revenue, costs, and profit or loss over a specific period?

    Answer: Income statement (profit and loss statement)

    The income statement (P&L) summarizes revenues and expenses over a reporting period, revealing whether the operation is profitable and where cost control is needed.

  2. A restaurant has monthly fixed costs of $20,000 and a contribution margin ratio of 40%. What sales volume is needed to break even?

    Answer: $50,000

    Break-even sales = Fixed Costs ÷ Contribution Margin Ratio = $20,000 ÷ 0.40 = $50,000.

  3. What is 'labor cost percentage' and how is it calculated?

    Answer: Total labor costs divided by total sales × 100

    Labor cost percentage equals total labor costs (wages, benefits, payroll taxes) divided by total sales multiplied by 100, benchmarking staffing efficiency against revenue.

  4. Which scheduling strategy most directly reduces labor cost percentage without reducing service quality?

    Answer: Cross-training employees to cover multiple stations, enabling flexible staffing adjustments

    Cross-training allows managers to schedule leaner crews that can flex across stations, matching labor deployment to actual business volume without sacrificing service standards.

  5. An executive chef is presented with a capital budget request for a new combi-oven costing $18,000. Which financial metric best evaluates whether this purchase is justified?

    Answer: Return on investment (ROI) considering labor savings, energy efficiency, and increased output

    ROI analysis compares the total financial benefits (labor savings, utility reduction, throughput gains) against the capital cost over the equipment's useful life to determine if the investment is financially sound.

  6. What is a budget variance in restaurant financial management?

    Answer: The difference between a budgeted (forecasted) financial figure and the actual result

    A budget variance is the difference between what was forecasted in the budget and what actually occurred, with unfavorable variances (costs higher or revenue lower than planned) requiring corrective action.