CMP Financial & Strategic Management 2

Question 1

Which financial metric measures the total revenue generated by an event minus all direct costs associated with that event?

Accepted Answer

Gross profit

Answer

Gross profit is calculated as total revenue minus direct (variable) costs, before deducting overhead or fixed expenses.

Question 2

An event planner is preparing a budget and must account for costs that remain constant regardless of attendance. These are known as:

Accepted Answer

Fixed costs

Answer

Fixed costs remain unchanged regardless of event attendance volume, such as venue rental fees or speaker contracts.

Question 3

When using zero-based budgeting for a meeting, the planner must:

Accepted Answer

Justify every expense from scratch each budget cycle

Answer

Zero-based budgeting requires justifying all expenditures from zero each cycle rather than using prior budgets as a baseline.

Question 4

A meeting professional is conducting a post-event financial reconciliation. Which document compares actual expenditures to the approved budget?

Accepted Answer

Variance report

Answer

A variance report highlights differences between budgeted and actual figures, enabling planners to identify over- or under-spending.

Question 5

Which pricing strategy sets registration fees based on what competitors charge for similar events?

Accepted Answer

Competitive pricing

Answer

Competitive pricing establishes fees by benchmarking against similar events in the market rather than solely on internal costs.

(CMP) Certified Meeting Professional Practice Test