Question 1

Planned or budgeted costs are usually based on historical costs.

Accepted Answer

A) True 
 B)False  True

Question 2

The term overhead means:

Accepted Answer

A)  gross profit less occupation costs. 
B)  all costs other than prime cost. 
C)  the total of food costs, beverage costs, and labor costs combined. 
A)  gross profit less occupation costs. 
B)  all costs other than prime cost. 
C)  the total of food costs, beverage costs, and labor costs combined. B

Question 3

Of the following, the best example of semi-variable costs is:

Accepted Answer

A)  total food cost. 
B)  total prime cost. 
C)  total payroll cost. 
A)  total food cost. 
B)  total prime cost. 
C)  total payroll cost. C

Question 4

The food cost percentage in a gourmet-style restaurant is typically higher than the food cost percentage in a fast-food restaurant.

Accepted Answer

A) True 
 B)False

Question 5

Meaningful comparisons of cost percentages can only be made between operations that are similar, such as two or more units in one national chain.

Accepted Answer

A) True 
 B)False

Question 6

Foods and beverages become costs to restaurants when the food and beverages are consumed.

Accepted Answer

A) True 
 B)False

Question 7

As business volume increases, fixed cost per unit decreases.

Accepted Answer

A) True 
 B)False

Question 8

In restaurants with relatively low menu prices, food cost percentages tend to be:

Accepted Answer

A)  lower than restaurants with high menu prices 
B)  the same as restaurants with high menu prices 
C)  higher than restaurants with high menu prices 
A)  lower than restaurants with high menu prices 
B)  the same as restaurants with high menu prices 
C)  higher than restaurants with high menu prices

Question 9

Prime cost is the sum of food cost, beverage cost, and labor cost.

Accepted Answer

A) True 
 B)False

Question 10

In the hotel and restaurant business, a sale is the exchange products or services for value.

Accepted Answer

A) True 
 B)False

Question 11

Sales may be expressed in terms of the number of units sold.

Accepted Answer

A) True 
 B)False

Question 12

While total variable cost may change as sales volume changes, variable cost per unit should remain unchanged.

Accepted Answer

A) True 
 B)False

Question 13

If 150 customers are served in a two-hour period in a restaurant with 50 seats, seat turnover for the period would be:

Accepted Answer

A)  1.5 
B)  3.0 
C)  0.667 
A)  1.5 
B)  3.0 
C)  0.667

Question 14

Every increase or decrease in sales volume brings a corresponding and proportionate change in:

Accepted Answer

A)  noncontrollable costs. 
B)  directly variable costs. 
C)  semivariable costs. 
A)  noncontrollable costs. 
B)  directly variable costs. 
C)  semivariable costs.

Question 15

If a restaurant purchases one shell strip for $60.00 and cuts 15 steaks from it, the unit cost for each steak is $4.00.

Accepted Answer

A) True 
 B)False

Question 16

Fixed costs are those that:

Accepted Answer

A)  may be readily controlled. 
B)  change as sales volume changes. 
C)  are unaffected by normal fluctuations in sales volume. 
A)  may be readily controlled. 
B)  change as sales volume changes. 
C)  are unaffected by normal fluctuations in sales volume.

Question 17

Low-margin operations are normally profitable if they maintain low sales volume.

Accepted Answer

A) True 
 B)False

Question 18

As used in cost control, the term cover means:

Accepted Answer

A)  those seated at one table in the dining room, regardless of the number of people. 
B)  one diner. 
C)  a heat-retaining device placed over dinner plates which permits them to be stacked. 
A)  those seated at one table in the dining room, regardless of the number of people. 
B)  one diner. 
C)  a heat-retaining device placed over dinner plates which permits them to be stacked.

Question 19

Historical costs can be documented and established through business records.

Accepted Answer

A) True 
 B)False

Question 20

One example of a controllable fixed cost is:

Accepted Answer

A)  advertising. 
B)  paper napkins. 
C)  depreciation. 
A)  advertising. 
B)  paper napkins. 
C)  depreciation.

Exam 1: Cost and Sales Concepts

Planned or budgeted costs are usually based on historical costs.

The term overhead means:

Of the following, the best example of semi-variable costs is:

The food cost percentage in a gourmet-style restaurant is typically higher than the food cost percentage in a fast-food restaurant.

Meaningful comparisons of cost percentages can only be made between operations that are similar, such as two or more units in one national chain.

Foods and beverages become costs to restaurants when the food and beverages are consumed.

As business volume increases, fixed cost per unit decreases.

In restaurants with relatively low menu prices, food cost percentages tend to be:

Prime cost is the sum of food cost, beverage cost, and labor cost.

In the hotel and restaurant business, a sale is the exchange products or services for value.

Sales may be expressed in terms of the number of units sold.

While total variable cost may change as sales volume changes, variable cost per unit should remain unchanged.

If 150 customers are served in a two-hour period in a restaurant with 50 seats, seat turnover for the period would be:

Every increase or decrease in sales volume brings a corresponding and proportionate change in:

If a restaurant purchases one shell strip for $60.00 and cuts 15 steaks from it, the unit cost for each steak is $4.00.

Fixed costs are those that:

Low-margin operations are normally profitable if they maintain low sales volume.

As used in cost control, the term cover means:

Historical costs can be documented and established through business records.

One example of a controllable fixed cost is:

The Control Process

Costvolumeprofit Relationships

Food Purchasing and Receiving Control

Food Storing and Issuing Control

Food Production Control I: Portions

Food Production Control II: Quantities

Monitoring Foodservice Operations I: Monthly Inventory and Monthly Food Cost

Monitoring Foodservice Operations II: Daily Food Cost

Monitoring Foodservice Operations III: Actual Versus Standard Food Costs

Menu Engineering and Analysis

Controlling Food Sales

Beverage Purchasing Control

Beverage Receiving, Storing, and Issuing Control

Beverage Production Control

Monitoring Beverage Operations

Beverage Sales Control

Labor Cost Considerations

Establishing Performance Standards

Training Staff

Monitoring Performance and Taking Corrective Action

Filters