CEH Budgeting and Inventory Control 4 — Questions and Answers
Question 1: What is the purpose of an 'occupancy-based budget' in housekeeping?
- To set a fixed spending limit regardless of guest volume
- To adjust budgeted costs in line with actual or projected occupancy rates (Correct answer)
- To calculate the number of housekeeping managers needed
- To determine guest satisfaction benchmarks
Correct answer: To adjust budgeted costs in line with actual or projected occupancy rates
An occupancy-based budget flexes variable costs—like supplies and labor—based on the number of occupied rooms, providing more accurate financial planning.
Question 2: Which of the following is an example of a variable cost in housekeeping?
- Property insurance premium
- Executive housekeeper's annual salary
- Cleaning supplies used per occupied room (Correct answer)
- Monthly equipment lease payments
Correct answer: Cleaning supplies used per occupied room
Cleaning supplies consumed per occupied room change directly with occupancy levels, making them a variable cost.
Question 3: A hotel replaces its entire linen inventory every 18 months at a cost of $45,000. What is the approximate monthly linen depreciation cost?
- $2,000
- $2,500 (Correct answer)
- $3,000
- $3,500
Correct answer: $2,500
$45,000 ÷ 18 months = $2,500 per month in linen depreciation.
Question 4: When issuing supplies from a central storeroom, which system ensures older stock is used before newer stock?
- LIFO rotation
- FIFO rotation (Correct answer)
- Random selection
- Weighted average rotation
Correct answer: FIFO rotation
FIFO (First In, First Out) rotation ensures older inventory is issued first, preventing product expiration and degradation.
Question 5: What is 'cost per occupied room' (CPOR) used to measure in housekeeping?
- The average room rate charged to guests
- The total housekeeping expense divided by the number of rooms occupied (Correct answer)
- The time taken to clean each guest room
- The number of amenity items placed per room
Correct answer: The total housekeeping expense divided by the number of rooms occupied
CPOR measures how much the housekeeping department spends per occupied room and is a key benchmark for cost efficiency.
Question 6: Which action would MOST likely reduce the cost per occupied room for a large hotel?
- Hiring additional supervisors for each floor
- Implementing labor scheduling software to align staffing with occupancy forecasts (Correct answer)
- Increasing par stock levels for all supply categories
- Switching all linens to single-use disposable products
Correct answer: Implementing labor scheduling software to align staffing with occupancy forecasts
Labor scheduling software reduces overtime and overstaffing by aligning workforce size with forecasted demand, directly lowering CPOR.
Question 7: An executive housekeeper receives three bids for cleaning chemicals. The cheapest bid is 20% lower in price but requires 50% more product per application. Which factor should guide the final decision?
- Always choose the lowest per-unit price
- Evaluate the true cost based on dilution ratio and actual usage per room (Correct answer)
- Choose the supplier with the fastest delivery time
- Select the product with the most appealing packaging
Correct answer: Evaluate the true cost based on dilution ratio and actual usage per room
The cost-in-use analysis considers dilution ratios and actual consumption, often revealing that a cheaper product costs more when used as directed.
CEH Budgeting and Inventory Control 4
What is the purpose of an 'occupancy-based budget' in housekeeping?