Financial Planning & Budgeting Flashcards

A housekeeping director wants to reduce linen replacement costs by 15%. Which strategy directly targets linen loss?

Answer: Implementing linen tracking with barcodes or RFID

RFID or barcode tracking reduces loss and theft by enabling accurate accounting of every linen item through the laundry cycle.

Which of the following best describes a 'flexible budget' in a housekeeping context?

Answer: A budget that adjusts to actual occupancy or production levels

A flexible budget recalculates allowable expenses based on actual activity levels, making it more accurate than a static budget.

Room attendant overtime pay is best classified as which type of cost?

Answer: Semi-variable cost

Labor costs have a fixed base (minimum staffing) and a variable component (overtime), making them semi-variable or mixed costs.

When a housekeeping budget shows an 'unfavorable variance,' this means:

Answer: Actual costs exceeded the budgeted amount

An unfavorable variance indicates that actual spending exceeded what was budgeted, requiring investigation and corrective action.

A property spends $4.50 per occupied room on guest amenities. At 80% occupancy with 200 rooms, what is the daily amenity cost?

Answer: $720

200 rooms × 80% occupancy = 160 occupied rooms; 160 × $4.50 = $720 daily amenity cost.

What is the primary purpose of a housekeeping department's monthly variance report?

Answer: To identify and explain deviations between budgeted and actual costs

Variance reports highlight where actual performance differed from the budget, enabling managers to address problems or recognize efficiencies.

Depreciation of housekeeping equipment is best described as:

Answer: A non-cash charge allocating an asset's cost over its useful life

Depreciation spreads the cost of a capital asset over its useful life as a non-cash accounting charge, not an out-of-pocket payment.