CHP Financial Planning & Budgeting 2 — Questions and Answers
Question 1: A housekeeping manager notices chemical supply costs increased 18% over the prior quarter. What is the FIRST step in addressing this variance?
- Order in larger bulk quantities immediately
- Analyze usage logs to identify waste or theft (Correct answer)
- Switch to a cheaper supplier without testing
- Reduce cleaning frequency to lower consumption
Correct answer: Analyze usage logs to identify waste or theft
Analyzing usage logs identifies whether the increase stems from waste, theft, price hikes, or increased workload before taking corrective action.
Question 2: Which budgeting method allocates funds based on the previous year's budget plus an incremental percentage?
- Zero-based budgeting
- Incremental budgeting (Correct answer)
- Activity-based budgeting
- Rolling budget
Correct answer: Incremental budgeting
Incremental budgeting starts from the prior period's figures and adjusts by a set percentage up or down.
Question 3: A hotel's housekeeping department has a fixed budget of $12,000/month. Occupancy rises 30% above forecast. What should the manager do?
- Absorb the extra costs within the fixed budget
- Request a budget amendment to reflect actual occupancy (Correct answer)
- Reduce staff hours to compensate
- Defer non-critical supplies to next month
Correct answer: Request a budget amendment to reflect actual occupancy
A budget amendment is appropriate when a significant unforeseen change in occupancy creates legitimate additional costs.
Question 4: What does the term 'rooms cleaned per labor hour' measure in housekeeping financial management?
- Guest satisfaction score
- Labor productivity ratio (Correct answer)
- Supply cost per occupied room
- Revenue per available room
Correct answer: Labor productivity ratio
Rooms cleaned per labor hour is a key productivity metric used to evaluate staffing efficiency and control labor costs.
Question 5: When preparing a housekeeping budget, par stock levels for linens are used to calculate:
- Daily wage requirements
- Capital expenditure reserves
- Inventory replenishment costs (Correct answer)
- Preventive maintenance schedules
Correct answer: Inventory replenishment costs
Par stock levels define the quantity of linens needed to operate, which directly determines how much inventory must be purchased and maintained.
Question 6: A cost-benefit analysis for purchasing a new floor-scrubbing machine shows a payback period of 14 months. What does this mean?
- The machine will need replacing in 14 months
- The savings generated will recover the purchase cost in 14 months (Correct answer)
- Maintenance costs will exceed purchase price in 14 months
- The machine depreciates fully in 14 months
Correct answer: The savings generated will recover the purchase cost in 14 months
Payback period is the time required for cumulative savings or benefits to equal the initial investment cost.
Question 7: Which expense category would a housekeeping department classify carpet shampooing equipment rental under?
- Capital expenditures
- Direct labor costs
- Operating supplies expense
- Contract services expense (Correct answer)
Correct answer: Contract services expense
Renting equipment from an outside vendor is classified as a contract or outside services expense, not a capital or supply cost.
CHP Financial Planning & Budgeting 2
A housekeeping manager notices chemical supply costs increased 18% over the prior quarter.
What is the FIRST step in addressing this variance?