Certified Dietary Manager Financial Management and Budgeting Questions and Answers

Question 1

A dietary department's monthly profit and loss (P&L) statement shows total revenue of $95,000. The cost of food was $35,000, labor costs were $48,000, and other operating expenses totaled $7,000. What was the department's net profit or loss for the month?

Accepted Answer

A $5,000 profit

Answer

To determine the net profit or loss, first sum all expenses (Food: $35,000 + Labor: $48,000 + Other: $7,000 = $90,000). Then, subtract the total expenses from the total revenue ($95,000 - $90,000 = $5,000). Since the result is a positive number, it represents a net profit.

Question 2

A dietary manager is requesting funds to purchase a new blast chiller that costs $18,000 and is expected to last for 10 years. This type of large, long-term acquisition would be planned for in which type of budget?

Accepted Answer

Capital budget

Answer

A capital budget is used for planning major, long-term investments and large equipment purchases, such as a blast chiller. An operating budget, in contrast, covers the day-to-day expenses required to run the department, like food, supplies, and labor.

Question 3

During one 40-hour work week, a long-term care facility produced 5,600 meals. The dietary staff worked a total of 700 hours during that week. What are the meals per labor hour (MPLH) for this period?

Accepted Answer

8.0

Answer

Meals per labor hour (MPLH) is a key productivity metric calculated by dividing the total number of meals produced by the total number of paid labor hours. In this case: 5,600 meals / 700 labor hours = 8.0 MPLH.

Question 4

A dietary manager uses the 'First-In, First-Out' (FIFO) method for inventory management and valuation. This method assumes that when an item is used, the cost assigned to it is based on the:

Accepted Answer

oldest units in inventory.

Answer

The FIFO method assumes that the first items purchased are the first ones to be used ('First-In, First-Out'). Therefore, the cost of goods sold is based on the cost of the oldest inventory, and the items remaining in ending inventory are valued at the cost of the most recently purchased items.

Question 5

A skilled nursing facility had a beginning food inventory of $22,000 on the first of the month. During the month, they purchased $40,000 worth of food. The ending inventory on the last day of the month was $18,000. If the total revenue for the month was $110,000, what was the food cost percentage?

Accepted Answer

40.0%

Answer

First, calculate the Cost of Goods Sold (COGS): Beginning Inventory ($22,000) + Purchases ($40,000) - Ending Inventory ($18,000) = $44,000. Then, calculate the food cost percentage: (COGS / Revenue) * 100 = ($44,000 / $110,000) * 100 = 40.0%.

Certified Dietary Manager Test Practice Test

Certified Dietary Manager Test Practice Test

Certified Dietary Manager Financial Management and Budgeting Questions and Answers