CHP Financial Management 3

Question 1

A hotel's fixed costs total $200,000 per month and variable costs are $40 per occupied room. If ADR is $120, what is the break-even number of rooms per month?

Accepted Answer

2,500 rooms

Answer

Contribution margin = $120 – $40 = $80; break-even = $200,000 ÷ $80 = 2,500 rooms.

Question 2

On the Uniform System of Accounts for the Lodging Industry (USALI), the Rooms department schedule would NOT typically include:

Accepted Answer

Depreciation on the building

Answer

Building depreciation is a non-operating expense found in the property and equipment section, not within the Rooms departmental schedule.

Question 3

Which internal control procedure best prevents employee theft at the front desk cash drawer?

Accepted Answer

Assigning one cashier per shift per drawer

Answer

Assigning a single cashier per drawer per shift establishes individual accountability and makes discrepancies easy to trace.

Question 4

A hotel's accounts receivable turnover ratio decreased significantly this quarter. This most likely indicates:

Accepted Answer

Slower collection or more lenient credit terms

Answer

A declining accounts receivable turnover means it is taking longer to collect outstanding balances, signaling collection issues or relaxed credit policies.

Question 5

When a restaurant uses the 'prime cost' metric, it combines which two cost categories?

Accepted Answer

Cost of goods sold and total labor cost

Answer

Prime cost equals cost of goods sold (food + beverage) plus total labor cost, typically the two largest controllable expenses in a restaurant.

(CHP) Certified Hospitality Professional Practice Test

(CHP) Certified Hospitality Professional Practice Test

CHP Financial Management 3