CPCE CPCE Financial Management & Budgeting

Question 1

What is 'food cost percentage' and what is the typical target range for US catered events?

Accepted Answer

Food cost as a % of selling price, typically 28–35%

Answer

Total labor cost as a % of revenue, typically 20–25%

Answer

Food cost as a % of total event budget, typically 50%

Answer

Overhead cost per guest, typically $10–$15

Question 2

In US catering, what does the term 'guaranteed guest count' mean in a contract?

Accepted Answer

The minimum number of guests the client guarantees to pay for, regardless of actual attendance

Answer

The maximum capacity of the venue

Answer

The number of guests confirmed 30 days before the event

Answer

The exact attendance number the caterer commits to serve

Question 3

Which cost category is considered a 'fixed cost' for a catering operation?

Accepted Answer

Monthly kitchen facility lease payments

Answer

Hourly wages for event-day servers

Answer

Food ingredient purchases

Answer

Disposable serviceware costs

Question 4

What is the purpose of a 'contribution margin' calculation in catering financial planning?

Accepted Answer

To determine how much revenue remains after variable costs to cover fixed costs and profit

Answer

To calculate the tax contribution for each catered event

Answer

To measure client satisfaction scores per event

Answer

To determine staff tip distribution percentages

Question 5

What does 'break-even analysis' help a caterer determine?

Accepted Answer

The minimum revenue needed to cover all costs before earning a profit

Answer

The optimal menu price for maximum guest satisfaction

Answer

The date when a new piece of equipment is fully depreciated

Answer

The point at which a long-term client contract should be renegotiated

Question 6

In a catering proposal, what is the difference between a 'per-head price' and an 'all-inclusive package price'?

Accepted Answer

Per-head pricing multiplies a per-guest rate by attendance; all-inclusive bundles all services into one flat fee

Answer

Per-head pricing includes gratuity; all-inclusive does not

Answer

All-inclusive always costs less than per-head pricing

Answer

Per-head applies only to food; all-inclusive covers only labor