CRP CRP Financial Management & Budgeting

Question 1

Which budget type requires recreation managers to justify every line item from zero each fiscal year, regardless of prior spending?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Formula-based budgeting

Answer

Line-item carryover budgeting

Question 2

A recreation department's fee schedule should primarily be based on which combination of factors?

Accepted Answer

Cost recovery goals, market rates, and ability-to-pay considerations for the target population

Answer

What neighboring departments charge regardless of local conditions

Answer

The personal preferences of department supervisors

Answer

Maximizing revenue without regard to participation rates

Question 3

What does a cost recovery ratio of 75% mean for a recreation program?

Accepted Answer

Program revenues cover 75% of direct program costs, with 25% subsidized by the department

Answer

The program operates at a 75% profit margin

Answer

75% of participants pay full price while 25% receive discounts

Answer

The program has recovered 75% of its startup investment

Question 4

Which financial document provides a snapshot of a recreation agency's assets, liabilities, and net position at a specific point in time?

Accepted Answer

Balance sheet (statement of net position)

Answer

Income statement

Answer

Cash flow statement

Answer

Budget variance report

Question 5

A recreation manager notices that program supply costs are consistently 15% over budget each quarter. What is the MOST appropriate first response?

Accepted Answer

Analyze purchasing patterns to identify causes and revise budget projections or procurement practices

Answer

Cut all supply orders by 15% immediately without analysis

Answer

Request emergency supplemental funding each quarter

Answer

Ignore the variance because it is under 20%

Question 6

Which cost is considered a fixed cost in recreation program budgeting?

Accepted Answer

Facility rental fee charged at a flat monthly rate

Answer

Cost of supplies per participant enrolled

Answer

Instructor pay calculated per class session taught

Answer

Printing costs for program brochures per run