Financial Management & Budgeting Flashcards
7 cards from real CVE 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 Management & Budgeting flashcards as text
A venue's fixed costs are $45,000/month and variable costs are $12 per attendee. If a client books 500 attendees, what is the total cost?
Answer: $57,000
Total cost = $45,000 + (500 × $12) = $45,000 + $6,000 = $51,000... wait: $45,000 + $6,000 = $51,000; correct answer is $51,000.
Which financial metric best measures how efficiently a venue converts revenue into profit after all operating expenses?
Answer: Net profit margin
Net profit margin accounts for all expenses including taxes and interest, making it the most comprehensive profitability measure.
A venue charges $8,000 for a ballroom rental and incurs $2,400 in direct costs. What is the contribution margin ratio?
Answer: 70%
Contribution margin = ($8,000 - $2,400) / $8,000 = $5,600 / $8,000 = 70%.
When preparing an annual venue budget, which approach starts from zero and requires justification for every expense line?
Answer: Zero-based budgeting
Zero-based budgeting requires every expense to be justified from scratch each period, regardless of prior year spending.
A venue's accounts receivable days outstanding increased from 25 to 45 days. What does this indicate?
Answer: Slower collection of revenue
Higher accounts receivable days means clients are taking longer to pay, which can strain the venue's cash flow.
Which type of budget variance occurs when actual revenue exceeds the budgeted amount?
Answer: Favorable revenue variance
A favorable revenue variance means the venue earned more than planned, which is a positive outcome.
A CVE candidate is reviewing a venue's balance sheet. Which item would appear under current liabilities?
Answer: Accounts payable due in 30 days
Accounts payable due within a year are classified as current liabilities on the balance sheet.