Budgeting & Inventory Control Flashcards
7 cards from real CEH practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Budgeting & Inventory Control flashcards as text
A housekeeping department's budget variance shows actual spending 12% above the planned amount. What is the FIRST corrective action an executive housekeeper should take?
Answer: Analyze line items to identify which categories are over budget
Analyzing specific line items identifies the root cause of variance before implementing any corrective measures.
Which inventory valuation method assigns the cost of the most recently purchased items to goods used first?
Answer: LIFO (Last In, First Out)
LIFO assigns the most recent purchase costs to items consumed first, which can affect reported costs during periods of inflation.
A hotel's housekeeping department uses 450 pounds of laundry chemicals per month. The safety stock is set at 100 pounds and lead time is 5 days with daily usage of 15 pounds. What is the reorder point?
Answer: 175 pounds
Reorder point = (daily usage × lead time) + safety stock = (15 × 5) + 100 = 175 pounds.
What does the term 'zero-based budgeting' mean in a housekeeping context?
Answer: Building each budget cycle from zero, justifying every expense anew
Zero-based budgeting requires every expense to be justified from scratch each cycle rather than using the prior period as a baseline.
In a par stock system for linens, what does 'par' refer to?
Answer: The minimum number of items needed to operate one complete service cycle
Par is the standard quantity of linen needed to support one complete operating cycle, ensuring adequate supply without excess.
Which cost is considered a FIXED cost for a housekeeping department?
Answer: Executive housekeeper's salary
The executive housekeeper's salary remains constant regardless of occupancy levels, making it a fixed cost.
A property calculates its cost per occupied room for housekeeping at $18.50. If occupancy rises by 200 rooms in a month with variable costs only, which outcome is most likely?
Answer: Total housekeeping cost increases while cost per occupied room stays stable
Variable costs increase with occupancy, raising total costs, while the cost per occupied room remains approximately constant since the rate is variable-driven.