CEH Budgeting and Inventory Control 3 — Questions and Answers
Question 1: What is a 'capital expenditure' in the context of a housekeeping budget?
- Monthly purchase of cleaning supplies
- A large purchase of long-term assets such as new laundry equipment (Correct answer)
- Daily wage payments to room attendants
- Costs for outsourced laundry services
Correct answer: A large purchase of long-term assets such as new laundry equipment
Capital expenditures are investments in long-term assets like equipment or furniture that provide value over multiple years.
Question 2: A property uses 3 rolls of toilet paper per occupied room per day. With 150 occupied rooms, how many rolls are needed for a 7-day period?
- 2,650
- 3,000
- 3,150 (Correct answer)
- 3,500
Correct answer: 3,150
3 rolls × 150 rooms × 7 days = 3,150 rolls needed for the period.
Question 3: Which inventory method values the most recently purchased items as the first to be used?
- FIFO (First In, First Out)
- LIFO (Last In, First Out) (Correct answer)
- Weighted Average Cost
- Specific Identification
Correct answer: LIFO (Last In, First Out)
LIFO assumes the last items purchased are the first used, which can affect inventory valuation during periods of price inflation.
Question 4: What does a 'budget variance report' primarily show a housekeeping executive?
- Guest complaint trends by department
- Differences between budgeted and actual expenditures (Correct answer)
- Employee scheduling conflicts and overtime hours
- Quality inspection scores by floor
Correct answer: Differences between budgeted and actual expenditures
A variance report compares planned budget amounts to actual spending, highlighting areas over or under budget.
Question 5: Which practice BEST reduces linen losses in a hotel's housekeeping department?
- Ordering larger quantities each month
- Implementing a controlled linen tracking and accountability system (Correct answer)
- Allowing staff to take worn linens home
- Purchasing only the lowest-cost linen products
Correct answer: Implementing a controlled linen tracking and accountability system
A formal linen tracking system with documented issuance and return records minimizes losses due to theft, misuse, or misplacement.
Question 6: An executive housekeeper is preparing next year's operating budget. Which document is MOST useful as a starting reference?
- The property's marketing plan
- Current year's actual expenditure and variance reports (Correct answer)
- The front desk occupancy log
- Competitor pricing information
Correct answer: Current year's actual expenditure and variance reports
Current year actuals and variances provide a data-driven foundation for realistic projections in the next budget cycle.
Question 7: What is the primary reason for establishing a 'minimum order quantity' (MOQ) for housekeeping supplies?
- To maximize the number of vendors used
- To ensure adequate stock levels and qualify for volume pricing (Correct answer)
- To reduce storage space requirements
- To slow down the rate of supply consumption
Correct answer: To ensure adequate stock levels and qualify for volume pricing
MOQs help maintain sufficient inventory to avoid stockouts and often unlock supplier discounts for bulk purchasing.
CEH Budgeting and Inventory Control 3
What is a 'capital expenditure' in the context of a housekeeping budget?