CEH Budgeting & Inventory Control 2

Question 1

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?

Accepted Answer

Analyze line items to identify which categories are over budget

Answer

Analyzing specific line items identifies the root cause of variance before implementing any corrective measures.

Question 2

Which inventory valuation method assigns the cost of the most recently purchased items to goods used first?

Accepted Answer

LIFO (Last In, First Out)

Answer

LIFO assigns the most recent purchase costs to items consumed first, which can affect reported costs during periods of inflation.

Question 3

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?

Accepted Answer

175 pounds

Answer

Reorder point = (daily usage × lead time) + safety stock = (15 × 5) + 100 = 175 pounds.

Question 4

What does the term 'zero-based budgeting' mean in a housekeeping context?

Accepted Answer

Building each budget cycle from zero, justifying every expense anew

Answer

Zero-based budgeting requires every expense to be justified from scratch each cycle rather than using the prior period as a baseline.

Question 5

In a par stock system for linens, what does 'par' refer to?

Accepted Answer

The minimum number of items needed to operate one complete service cycle

Answer

Par is the standard quantity of linen needed to support one complete operating cycle, ensuring adequate supply without excess.

(CEH) Certified Executive Housekeeper Practice Test

(CEH) Certified Executive Housekeeper Practice Test

CEH Budgeting & Inventory Control 2