CRM Financial Management 3

Question 1

A restaurant generates $800,000 in annual revenue with $640,000 in total expenses. What is the net profit margin?

Accepted Answer

20%

Answer

Net profit = $800,000 − $640,000 = $160,000; margin = $160,000 ÷ $800,000 = 20%.

Question 2

Which costing method assigns overhead costs to menu items based on the resources each item actually consumes?

Accepted Answer

Activity-based costing

Answer

Activity-based costing (ABC) allocates overhead based on the actual activities and resources each product consumes.

Question 3

A restaurant's current assets are $45,000 and current liabilities are $30,000. What is the current ratio?

Accepted Answer

1.50

Answer

Current ratio = $45,000 ÷ $30,000 = 1.50, indicating the restaurant can cover short-term obligations.

Question 4

What is the purpose of a rolling budget in restaurant financial management?

Accepted Answer

To continuously update forecasts by adding future periods as past periods close

Answer

A rolling budget is continuously updated, dropping the most recent period and adding a new future period to maintain a consistent planning horizon.

Question 5

Which of the following best describes 'depreciation' in restaurant accounting?

Accepted Answer

Reduction in asset value over time allocated as an expense

Answer

Depreciation spreads the cost of long-term assets like equipment and furniture over their useful lives as a non-cash expense.

(CRM) Certified Restaurant Manager Practice Test