CMM Budgeting & Financial Management 2

Question 1

A conference has fixed costs of $60,000, a registration fee of $500, and a variable cost of $200 per attendee. How many paid attendees are needed to break even?

Accepted Answer

200

Answer

Break-even = fixed costs ÷ (price − variable cost) = 60,000 ÷ 300 = 200 attendees.

Question 2

Which cost is most likely to be classified as fixed in a meeting budget?

Accepted Answer

Keynote speaker honorarium

Answer

A speaker fee stays the same no matter how many attendees register, making it a fixed cost.

Question 3

In zero-based budgeting, how is each line item for a recurring annual meeting determined?

Accepted Answer

Justified from scratch each cycle based on current needs

Answer

Zero-based budgeting requires every expense to be justified anew rather than carried over from prior years.

Question 4

A hotel adds a 24% service charge to F&B and the state imposes sales tax on that service charge. On a $10,000 food minimum with 8% tax applied to both, what is the total?

Accepted Answer

$13,392

Answer

$10,000 + $2,400 service charge = $12,400, and 8% tax on $12,400 adds $992 for $13,392.

Question 5

What is the primary purpose of a contingency line in a meeting budget?

Accepted Answer

To cover unforeseen expenses or revenue shortfalls

Answer

A contingency reserve, often 5-10%, protects against unexpected costs and shortfalls.

CMM - Certified Meeting Management Practice Test

CMM - Certified Meeting Management Practice Test

CMM Budgeting & Financial Management 2