CFD Financial Management & Budgeting 3

Question 1

A florist purchases roses at $1.20 per stem and uses the standard industry markup of 3x to 4x. What should the retail price per stem be?

Accepted Answer

$3.60–$4.80

Answer

Applying a 3x–4x markup: $1.20 × 3 = $3.60 and $1.20 × 4 = $4.80, giving a range of $3.60–$4.80.

Question 2

What is the purpose of maintaining a petty cash fund in a floral shop?

Accepted Answer

Covering small, everyday cash expenses

Answer

Petty cash funds are maintained to handle small, routine cash purchases without writing checks or processing card payments.

Question 3

A bridal client requests a budget breakdown before committing to a floral contract. Which item should be listed as a separate line item?

Accepted Answer

Delivery and setup fee

Answer

Delivery and setup fees are a direct client-facing cost that should be itemized separately in wedding floral proposals.

Question 4

Which term describes the minimum amount a business must earn to cover all its costs with zero profit or loss?

Accepted Answer

Break-even point

Answer

The break-even point is where total revenues exactly equal total costs, resulting in neither profit nor loss.

Question 5

A floral designer is creating a budget for a corporate event. Which expense is a variable cost?

Accepted Answer

Flowers and greenery per arrangement

Answer

Flowers and greenery costs vary directly with the number of arrangements produced, making them variable costs.

(CFD) Certified Floral Designer Practice Test