Financial Planning & Budgeting Flashcards
7 cards from real CRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Planning & Budgeting flashcards as text
Which cost control technique involves calculating the ideal (theoretical) food cost and comparing it to the actual food cost to identify discrepancies?
Answer: Standard costing
Standard costing establishes a theoretical cost benchmark based on recipes and portions, and variance from actual cost reveals waste, theft, or portioning errors.
A restaurant's EBITDA is $95,000. What does this figure represent?
Answer: Earnings before interest, taxes, depreciation, and amortization
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is used to assess core operational profitability before financing and accounting adjustments.
When preparing a capital budget, which factor distinguishes it from an operating budget?
Answer: Capital budgets plan for long-term asset purchases such as equipment and renovations
Capital budgets focus on significant long-term investments in fixed assets, whereas operating budgets address the day-to-day revenue and expense cycle.
A restaurant's average check is $32 and it serves 280 covers on a Saturday. If food cost is 30%, what is the food cost dollar amount for that day?
Answer: $2,688
Total sales = 280 × $32 = $8,960; food cost = 30% × $8,960 = $2,688.
Which of the following best describes 'opportunity cost' in restaurant financial decision-making?
Answer: The potential revenue or benefit lost by choosing one option over another
Opportunity cost is the forgone value of the next best alternative not chosen, such as using dining space for storage instead of generating revenue.
A restaurant's RevPASH (Revenue Per Available Seat Hour) is $18. If the dining room has 60 seats and operates 5 hours for dinner, what is the total expected revenue?
Answer: $5,400
Total revenue = RevPASH × seats × hours = $18 × 60 × 5 = $5,400, a key metric for maximizing dining room productivity.
What does a high accounts payable days (DPO) figure indicate about a restaurant's financial management?
Answer: The restaurant is taking longer to pay its suppliers, which may preserve cash
A high Days Payable Outstanding (DPO) means the restaurant is extending the time it takes to pay vendors, which keeps more cash available for operations.