CHP Financial Management & Budgeting 2

Question 1

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

Accepted Answer

70.8%

Answer

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

Question 2

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

Accepted Answer

Zero-based budgeting

Answer

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

Question 3

In hospitality, 'flow-through' refers to:

Accepted Answer

The percentage of revenue that reaches GOP after variable costs

Answer

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

Question 4

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

Accepted Answer

35.0%

Answer

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

Question 5

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

Accepted Answer

Balance sheet

Answer

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

(CHP) Certified Hospitality Professional Practice Test