CMP Budget Management & Financial Planning 3

Question 1

Which registration pricing strategy is MOST effective for encouraging early commitment and improving cash flow?

Accepted Answer

Implementing tiered early-bird pricing with deadlines that progressively increase the fee

Answer

Tiered early-bird pricing incentivizes early registration, improving cash flow and providing more accurate attendance projections.

Question 2

A planner is creating a zero-based budget for a new annual conference. What does this approach require?

Accepted Answer

Justifying every expense from zero regardless of whether it appeared in previous budgets

Answer

Zero-based budgeting requires each expense to be justified anew, preventing automatic carryover of outdated or unnecessary costs.

Question 3

Which statement BEST describes the purpose of a food and beverage minimum in a hotel contract?

Accepted Answer

It establishes the minimum revenue the hotel expects from catering, which the client is liable for even if not fully consumed

Answer

An F&B minimum is a guaranteed revenue floor for the hotel; the client owes the minimum regardless of actual consumption.

Question 4

A meeting generates $120,000 in registration revenue and incurs $95,000 in direct costs and $15,000 in overhead allocation. What is the event's contribution margin?

Accepted Answer

$25,000

Answer

Contribution margin equals revenue minus direct costs: $120,000 − $95,000 = $25,000 (overhead is subtracted to get net profit, not contribution margin).

Question 5

When should a CMP MOST appropriately release funds held in the contingency reserve?

Accepted Answer

Only when a specific, identified risk event occurs that requires unplanned expenditure

Answer

Contingency funds should be released only when an actual unforeseen cost arises, preserving the reserve for genuine emergencies.

(CMP) Certified Meeting Professional Practice Test

(CMP) Certified Meeting Professional Practice Test

CMP Budget Management & Financial Planning 3