CFESA Business Operation 5 — Questions and Answers
Question 1: Under which circumstance should a service technician collect payment at the time of service rather than invoicing later?
- Only when the customer requests it
- When company policy requires COD for new or credit-risk customers (Correct answer)
- Never — all invoices should be sent by mail
- Only for warranty repairs
Correct answer: When company policy requires COD for new or credit-risk customers
COD (cash on delivery) policies for new or high-risk customers reduce the risk of uncollected accounts receivable.
Question 2: Which OSHA regulation is MOST relevant to technicians servicing commercial cooking equipment in a restaurant kitchen?
- 29 CFR 1910.147 — Control of Hazardous Energy (Lockout/Tagout) (Correct answer)
- 29 CFR 1910.217 — Mechanical Power Presses
- 29 CFR 1910.333 — Commercial Fishing Vessel Safety
- 29 CFR 1910.94 — Ventilation for Paint Spray Operations
Correct answer: 29 CFR 1910.147 — Control of Hazardous Energy (Lockout/Tagout)
Lockout/Tagout (29 CFR 1910.147) is the primary OSHA standard governing de-energization of equipment before servicing.
Question 3: A service company wants to set labor rates that ensure profitability. Which factor is MOST important to include in the rate calculation?
- The rates charged by the lowest-priced competitor only
- Fully loaded technician cost including wages, benefits, taxes, and allocated overhead (Correct answer)
- Only the technician's base hourly wage
- The manufacturer's suggested retail price for the equipment
Correct answer: Fully loaded technician cost including wages, benefits, taxes, and allocated overhead
Fully loaded cost accounting ensures labor rates cover all actual costs and generate sufficient profit margin.
Question 4: What is the primary function of a 'return merchandise authorization' (RMA) number in parts management?
- It authorizes a technician to purchase parts without a purchase order
- It is a supplier-issued tracking number required to return defective or incorrect parts (Correct answer)
- It grants the customer a discount on future parts purchases
- It certifies that a part meets UL safety standards
Correct answer: It is a supplier-issued tracking number required to return defective or incorrect parts
An RMA number is issued by the supplier to authorize and track a parts return, ensuring proper credit or replacement processing.
Question 5: When a service company hires a new technician from a competitor, which precaution is MOST important regarding customer data?
- Immediately assign the technician to service the competitor's former customers
- Ensure the technician does not use or share confidential customer information from the previous employer (Correct answer)
- Ask the technician to bring customer contact lists from the old job
- Verify the technician signed a non-disclosure agreement with the competitor
Correct answer: Ensure the technician does not use or share confidential customer information from the previous employer
Using a competitor's confidential customer data constitutes misappropriation of trade secrets and creates significant legal liability.
Question 6: Which key performance indicator (KPI) measures how quickly a service company collects payment after issuing invoices?
- Gross margin percentage
- Days sales outstanding (DSO) (Correct answer)
- First-call completion rate
- Technician utilization rate
Correct answer: Days sales outstanding (DSO)
Days sales outstanding (DSO) measures the average number of days between invoicing and payment collection.
Question 7: A customer disputes an invoice claiming the technician did not perform all billed work. Which record BEST resolves this dispute in the service company's favor?
- The technician's verbal statement
- A signed work order listing completed tasks with the customer's signature obtained at job completion (Correct answer)
- The dispatcher's notes from the initial call
- A manufacturer's service bulletin
Correct answer: A signed work order listing completed tasks with the customer's signature obtained at job completion
A customer-signed work order documenting completed tasks provides legally defensible evidence of services rendered.
CFESA Business Operation 5
Under which circumstance should a service technician collect payment at the time of service rather than invoicing later?