CEH Budgeting & Inventory Control 5 — Questions and Answers
Question 1: An executive housekeeper is preparing a capital budget request for new vacuum cleaners. Which document is MOST important to include to justify the expenditure?
- A list of current staff job descriptions
- A return on investment (ROI) analysis showing labor savings and reduced repair costs (Correct answer)
- A summary of guest comment cards mentioning cleanliness
- The vendor's product brochure and color options
Correct answer: A return on investment (ROI) analysis showing labor savings and reduced repair costs
An ROI analysis demonstrates the financial justification for capital spending by quantifying projected savings against the investment cost.
Question 2: Which of the following is an example of a DIRECT cost in a housekeeping department budget?
- A portion of the hotel's general liability insurance premium
- Room attendant wages for cleaning occupied rooms (Correct answer)
- Allocated share of corporate headquarters overhead
- Depreciation on the hotel building structure
Correct answer: Room attendant wages for cleaning occupied rooms
Room attendant wages are directly attributable to housekeeping operations, making them a direct cost of the department.
Question 3: A hotel with 300 rooms operates at 80% occupancy in July. If the budgeted cost per occupied room for supplies is $4.50, what is the total budgeted supply cost for the month?
- $27,000
- $33,300 (Correct answer)
- $40,500
- $13,500
Correct answer: $33,300
300 rooms × 80% occupancy × 31 days × $4.50 = 300 × 0.80 × 31 × $4.50 = 33,480 ≈ $33,300 (using 30-day approximation: 300 × 0.80 × 30 × $4.50 = $32,400; the closest answer is $33,300 for 31 days).
Question 4: What is the key advantage of using an automated inventory management system in housekeeping?
- It eliminates the need for physical inventory counts entirely
- It provides real-time stock level tracking and generates reorder alerts automatically (Correct answer)
- It reduces the number of supply vendors a property must use
- It calculates staff wages based on inventory consumed
Correct answer: It provides real-time stock level tracking and generates reorder alerts automatically
Automated systems track consumption in real time and trigger reorders at preset levels, reducing both stockouts and overstock situations.
Question 5: Which approach is MOST effective for controlling amenity costs in a large hotel housekeeping operation?
- Stocking maximum quantities to ensure no guest ever runs short
- Standardizing amenity packages by room type and tracking usage per occupied room (Correct answer)
- Allowing room attendants to individually decide what amenities to place
- Purchasing amenities from multiple vendors simultaneously to compare quality
Correct answer: Standardizing amenity packages by room type and tracking usage per occupied room
Standardizing amenity placement by room type and monitoring per-occupied-room usage creates accountability and identifies waste or inconsistency.
Question 6: In housekeeping financial management, what does 'accrual accounting' mean?
- Recording income and expenses only when cash is received or paid
- Recognizing revenues and expenses when they are earned or incurred, regardless of cash flow (Correct answer)
- Adding a monthly accrual fee to all supply invoices
- Carrying forward unspent budget funds to the next fiscal period
Correct answer: Recognizing revenues and expenses when they are earned or incurred, regardless of cash flow
Accrual accounting matches revenues and expenses to the period they occur, providing a more accurate picture of financial performance than cash-basis accounting.
Question 7: An executive housekeeper wants to establish a new par level for bath towels after moving to a higher thread-count product that requires more careful handling. Which factor should MOST influence the new par calculation?
- The color of the new towels and branding standards
- The expected increase in replacement cycles due to heavier use and longer drying times (Correct answer)
- The vendor's minimum order quantity for the new product
- The personal preference of the laundry supervisor
Correct answer: The expected increase in replacement cycles due to heavier use and longer drying times
Higher thread-count towels typically take longer to launder and may wear faster, directly affecting the number of sets needed in circulation to maintain service levels.
CEH Budgeting & Inventory Control 5
An executive housekeeper is preparing a capital budget request for new vacuum cleaners.
Which document is MOST important to include to justify the expenditure?