CRP Financial Planning & Budgeting 3

Question 1

A restaurant's contribution margin per cover is $18 and fixed costs are $27,000 per month. How many covers are needed to break even?

Accepted Answer

1,500 covers

Answer

Break-even covers = $27,000 ÷ $18 = 1,500 covers, the point at which contribution margin exactly covers fixed costs.

Question 2

Which financial document provides a snapshot of a restaurant's assets, liabilities, and owner's equity at a specific point in time?

Accepted Answer

Balance sheet

Answer

The balance sheet (statement of financial position) captures what the business owns, owes, and the owner's stake on a single date.

Question 3

A restaurant owner wants to evaluate whether a new $50,000 piece of kitchen equipment is worthwhile. Which analysis compares the cost against projected savings or revenue gains?

Accepted Answer

Cost-benefit analysis

Answer

Cost-benefit analysis weighs the total expected benefits of an investment against its total costs to determine if it is financially justified.

Question 4

If a restaurant has $45,000 in current assets and $18,000 in current liabilities, what is the current ratio?

Accepted Answer

2.5

Answer

Current ratio = $45,000 ÷ $18,000 = 2.5, meaning the restaurant has $2.50 in current assets for every $1.00 of current liabilities.

Question 5

What is the primary difference between a fixed budget and a flexible budget in restaurant management?

Accepted Answer

Flexible budgets adjust expense targets based on actual sales volume

Answer

A flexible budget recalculates cost targets to reflect actual sales volume, making variances more meaningful than a static fixed budget.

(CRP) Certified Restaurant Professional Practice Test

(CRP) Certified Restaurant Professional Practice Test

CRP Financial Planning & Budgeting 3