Practice Test Geeks(CHP) Certified Hospitality Professional Practice Test
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Financial Management & Budgeting Flashcards

7 cards from real CHP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management & Budgeting flashcards as text

  1. A hotel's RevPAR is $85 and its ADR is $120. What is the hotel's occupancy rate?

    Answer: 70.8%

    RevPAR ÷ ADR = occupancy rate: $85 ÷ $120 = 70.8%.

  2. Which budgeting method requires every expense to be justified from zero each budget cycle?

    Answer: Zero-based budgeting

    Zero-based budgeting (ZBB) starts from scratch each period, requiring justification for all expenditures rather than adjusting prior-year figures.

  3. In hospitality, 'flow-through' refers to:

    Answer: The percentage of revenue that reaches GOP after variable costs

    Flow-through measures what percentage of incremental revenue drops to the GOP line after covering variable costs.

  4. A restaurant has total revenue of $500,000 and a food cost of $175,000. What is the food cost percentage?

    Answer: 35.0%

    Food cost % = (food cost ÷ revenue) × 100 = ($175,000 ÷ $500,000) × 100 = 35%.

  5. Which financial statement shows a hotel's assets, liabilities, and owner's equity at a specific point in time?

    Answer: Balance sheet

    The balance sheet (statement of financial position) presents assets, liabilities, and equity at a single date.

  6. A hotel's variable cost per occupied room is $35 and the ADR is $110. What is the contribution margin per room?

    Answer: $75

    Contribution margin = ADR − variable cost = $110 − $35 = $75.

  7. The GOP PAR metric stands for:

    Answer: Gross Operating Profit Per Available Room

    GOP PAR (Gross Operating Profit Per Available Room) measures profitability per available room regardless of occupancy.