Deck 13: Management of Financial Resources 

Question 1

The menu pricing method that uses desired food cost percentage in determining the menu sales price is termed the ________ pricing method.

A)factor
B)actual
C)value
D)prime cost

Answer 1

A

Question 2

A foodservice operation with a food cost of 40% has food costs that are equal to 40% of ________.

A)operating costs
B)total costs
C)labor costs
D)revenue

Answer 2

D

Question 3

The ________ says that a company who chooses to use the LIFO method for valuing their inventory must use that same method each year.

A)materiality principle
B)cost principle
C)consistency principle
D)business entity concept

Answer 3

C

Question 4

The financial statement that shows financial position at a point in time is the ________.

A)income statement
B)balance sheet
C)statement of change in financial position
D)P&L statement

Question 5

Typically the first step in the budget process is to compile the ________.

A)pro forma income statement
B)capital expenditure budget
C)expenditure budget
D)sales budget

Question 6

Cash,marketable securities,and accounts receivable are all categorized as ________ on a balance sheet.

A)current liabilities
B)current assets
C)owner's equity
D)fixed assets

Question 7

Sam Jones owns a local restaurant.He buys steaks from the restaurant to serve his family at home for dinner.Sam should record this sale in the restaurant's books because of the:

A)going-concern concept.
B)cost principle.
C)business entity principle.
D)materiality principle.

Question 8

Jim had a beginning inventory of $5,500.During the month of April he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month.His sales for April were $8,750.What was his inventory turnover?

A)1)88 turns
B)86:1
C)45.7%
D)1)2 times

Question 9

Having customers pay by the ounce for items purchased on sandwich or salad bars is an example of ________.

A)sociocultural factor planning
B)actual cost pricing
C)product marketing
D)pricing psychology

Question 10

A pro forma income statement:

A)is used to complete a common-size income statement.
B)forecasts revenue and expenses for a future period.
C)summarizes sales and expenditures for the previous year.
D)displays revenues and expenses for the past month.

Question 11

Calculation of the current ratio would involve which two pieces of data?

A)total revenue and total expenses
B)current assets and current liabilities
C)total assets and total liabilities
D)net profit and total sales

Question 12

One difference between a for-profit and a not-for-profit organization is:

A)excess revenue over expenses,in a for-profit organization can go to the organization's owners,in a not-for-profit organization this excess goes back into the organization.
B)a for-profit organization is not operated for anyone's personal gain,a not-for-profit operation is expected to provide a return for its investors.
C)a for-profit organization will budget for a profit each year and a not-for-profit will budget to break-even.
D)a for-profit organization will prepare an income statement and balance sheet each year,a not-for-profit will not prepare these statements.

Question 13

The breakeven point is where:

A)total revenue equals total costs.
B)total assets equal total liabilities plus owner's equity.
C)fixed cost equals variable cost.
D)total profit equals total costs.

Question 14

Ratios that are used to examine an establishment's ability to meet its long-term financial obligations are termed ________ ratios.

A)solvency
B)profitability
C)operating
D)liquidity

Question 15

Accumulated depreciation is applied to which balance sheet category?

A)long-term liabilities
B)fixed assets
C)current liabilities
D)current assets

Question 16

The denominator used when calculating a common size income statement is ________.

A)total sales
B)total liabilities
C)total expenses
D)total assets

Question 17

Assets and liabilities are a part of which financial statement?

A)balance sheet
B)opening budget
C)P&L statement
D)income statement

Question 18

Perception of value:

A)is what the manager believes should be charged for menu items.
B)is used by managers in determining the type of production equipment to purchase.
C)is what customers believe a menu item is worth.
D)is a rating used by customers in choosing a new restaurant in which to dine.

Question 19

Sarah Michaels wants to evaluate her operation's efficiency by calculating the number of labor minutes per meal.Data from the previous week indicate that she served 7,500 meals.Her timecards indicated that employees worked a total of 625 hours for the week.What were labor minutes per meal for Sarah's operation?

A))08
B)15
C)5
D)12

Question 20

Which of the following statements is true?

A)Total variable costs do not vary with changes in sales volume.
B)Total fixed cost per unit do not vary with changes in sales volume.
C)Total fixed costs do not vary with changes in sales volume.
D)Total costs do not vary with changes in sales volume.

Question 21

The breakeven point is the point at which ________ and _______ are equal.

Question 22

Improving the bottom line in an organization can occur either by increasing revenues or reducing costs.

Question 23

A budget is a plan for operating a business expressed in financial terms.

Question 24

The pay back period is:

A)uses the table of discounted cash flows to determine yearly expected savings.
B)is calculated by dividing initial investment by expected yearly income or savings.
C)the time period that is required to process invoices and pay for short-life items such as food.
D)considers the time value of money.

Question 25

The formula for the break even point is 1 - (variable cost/sales).

Question 26

A comparison of ratios over several periods of time is termed trend analysis.

Question 27

The fundamental accounting equation is assets = liabilities + owner's equity.

Question 28

The time value of money concept suggests that having a $1.00 in the future is worth more than having a $1.00 today.

Question 29

The actual cost menu pricing method incorporates fixed and variable costs and desired profit in determining the menu sales price.

Question 30

A turkey sandwich has a food cost of $.75 and is sold for $2.25.If the manager wanted to achieve a 40% food cost,which of the following should occur?

A)The price of the sandwich should be decreased.
B)The price of the sandwich should be increased.
C)The ingredients in the sandwich should be changed to reduce cost of the food in the sandwich.
D)Nothing,the food cost percentage is currently at 40%.

Question 31

The formula to calculate food cost percentage is ________.

Question 32

The cost method of accounting differs from the accrual method in that expenses are recorded when they are incurred in the cost method and when they are paid in the accrual method.

Question 33

Cashiers who take cash from customers should be the ones to count cash drawers and reconcile with cash register receipts.

Question 34

A high inventory turnover ratio indicates large amounts of money are tied up in inventory.

Question 35

A ________ provides a visual way to quickly access financial performance.

Question 36

Which of the following costs is typically the highest in a foodservice operation?

A)labor
B)supplies
C)food
D)overhead

Question 37

The Net Present Value method for evaluating a capital budget request incorporates the time value of money concept.