CHP Financial Planning & Budgeting 3 — Questions and Answers
Question 1: A housekeeping director wants to reduce linen replacement costs by 15%. Which strategy directly targets linen loss?
- Increasing linen par levels
- Implementing linen tracking with barcodes or RFID (Correct answer)
- Hiring more laundry staff
- Switching to a lower thread count linen
Correct 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.
Question 2: Which of the following best describes a 'flexible budget' in a housekeeping context?
- A budget with no spending limits
- A budget that adjusts to actual occupancy or production levels (Correct answer)
- A budget reviewed only at year-end
- A budget funded entirely by department revenue
Correct 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.
Question 3: Room attendant overtime pay is best classified as which type of cost?
- Fixed cost
- Semi-variable cost (Correct answer)
- Purely variable cost
- Sunk cost
Correct answer: Semi-variable cost
Labor costs have a fixed base (minimum staffing) and a variable component (overtime), making them semi-variable or mixed costs.
Question 4: When a housekeeping budget shows an 'unfavorable variance,' this means:
- Actual costs came in below budget
- Actual costs exceeded the budgeted amount (Correct answer)
- The budget was not submitted on time
- Occupancy was lower than expected
Correct answer: Actual costs exceeded the budgeted amount
An unfavorable variance indicates that actual spending exceeded what was budgeted, requiring investigation and corrective action.
Question 5: A property spends $4.50 per occupied room on guest amenities. At 80% occupancy with 200 rooms, what is the daily amenity cost?
- $360
- $720 (Correct answer)
- $900
- $1,080
Correct answer: $720
200 rooms × 80% occupancy = 160 occupied rooms; 160 × $4.50 = $720 daily amenity cost.
Question 6: What is the primary purpose of a housekeeping department's monthly variance report?
- To schedule preventive maintenance
- To identify and explain deviations between budgeted and actual costs (Correct answer)
- To track guest satisfaction trends
- To plan staff vacation schedules
Correct 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.
Question 7: Depreciation of housekeeping equipment is best described as:
- A cash expense paid monthly to vendors
- A non-cash charge allocating an asset's cost over its useful life (Correct answer)
- The repair cost for broken equipment
- A tax applied to equipment purchases
Correct 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.
CHP Financial Planning & Budgeting 3
A housekeeping director wants to reduce linen replacement costs by 15%.
Which strategy directly targets linen loss?