Deck 1: Managing Revenue and Expense

Question 1

When significant variations from planned results occur foodservice managers must

A) determine the cause, identify the problem, and take corrective action.
B) take corrective action, determine the cause, and identify the problem.
C) identify the problem, take corrective action, and determine the cause.
D) identify the problem, determine the cause, and take corrective action.

Answer 1

D

Question 2

Professional foodservice managers are different from many other managers who manufacture products because foodservice managers

A) supervise staff.
B) purchase raw ingredients.
C) have contact with the ultimate consumer.
D) are responsible for achieving organizational goals.

Answer 2

C

Question 3

An operation's expenses are the

A) number of guests it serves.
B) sales dollars generated by the business.
C) dollars that remain after all costs have been paid.
D) costs of the items required to operate the business.

Answer 3

D

Question 4

Management's view of the proper amount of expense required to generate a given level of sales is referred to as

A) total cost.
B) prime cost.
C) ideal expense.
D) cost of goods sold.

Question 5

Complete the formula: Revenue - Desired Profit =

A) Food Cost
B) Cost of Sales
C) Ideal Expense
D) Other Expense

Question 6

What is the first step in the Five-step management process?

A) Controlling
B) Planning
C) Directing
D) Organizing

Question 7

Which is a major foodservice expense category all managers must learn to control?

A) Taxes
B) Revenue
C) Labor costs
D) Union costs

Question 8

What is an expense that would be included in an operation's cost of food?

A) Linen
B) Coffee
C) Gas for a range
D) Refrigerator repair

Question 9

What is the food and beverage cost percentage achieved by The Tampopo Noodle House?

A) 22.9%
B) 27.5%
C) 37.5%
D) 42.9%

Question 10

What is the Total Expense amount for The Tampopo Noodle House?

A) $600,000
B) $650,000
C) $700,000
D) $750,000

Question 11

What is the Profit achieved by The Tampopo Noodle House?

A) $50,000
B) $75,000
C) $100,000
D) $125,000

Question 12

What is the profit percentage achieved by The Tampopo Noodle House?

A) 6.25%
B) 12.50%
C) 37.50%
D) 50.25%

Question 13

If the desired profit for The Tampopo Noodle House was 15% of sales, what amount of profit should it have achieved on revenue of $800,000?

A) $100,000
B) $120,000
C) $140,000
D) $160,000

Question 14

A manager generated a food and beverage cost of $1,575 in one week, and achieved a 28% food and beverage cost percentage in that week. What is the amount of food and beverage revenue the manager achieved in the week?

A) $5,080
B) $5,430
C) $5,625
D) $6,055

Question 15

What is a term that means the same thing as a foodservice operation's revenues?

A) The sales dollars the operation achieves
B) The amount of profit the operation achieves
C) The cost of all the items required to operate the business
D) The dollars that remain after all the operation's expenses have been paid

Question 16

In what cost category do managers record nonalcoholic beverage expenses?

A) Revenue
B) Food cost
C) Beverage cost
D) Other expenses

Question 17

What is the formula managers use to calculate a foodservice operation's profits?

A) Revenue - Expense = Profits
B) Revenue + Expenses = Profits
C) Sales + Food cost - Labor cost = Profits
D) Sales + Food cost + Labor cost = Profits

Question 18

What is the formula managers used to calculate a foodservice operation's Total Expense Percentage?

A) Labor Cost ÷ Revenue = Total Expense %
B) Total Expense ÷ Profit = Total Expense %
C) Total Expense ÷ Revenue = Total Expense %
D) Total Expense ÷ Other expenses = Total Expense %

Question 19

Last month a manager's food expense equaled $30,000. Labor expense for the month equaled $26,000, and other expenses equaled $12,000. Revenue for the month was $85,000. What was this manager's total expense percentage?

A) 40%
B) 45%
C) 80%
D) 85%

Question 20

A manager creates a 6-month staff salary budget. How much of the salary budget can this manager spend each month and still stay within the budget?

A) 15.50%
B) 16.67%
C) 17.50%
D) 18.67%

Question 21

What is the effect on an operation if its manager is able to increase the number of guests served or increase the amount each guest buys?

A) Revenue will decrease and expenses will decrease
B) Revenue will decrease and expenses will increase
C) Revenue will increase and expenses will decrease
D) Revenue will increase and expenses will increase

Question 22

What is the name for a forecast or estimate of future operating revenue, expense and profit?

A) P&L
B) Budget
C) Income statement
D) Expense category

Question 23

What is the formula used to calculate a Food Cost Percentage?

A) Profit ÷ Revenue = Food Cost %
B) Food Cost ÷ Food Sales = Food Cost %
C) Total Expense ÷ Revenue = Food Cost %
D) Labor Expense ÷ Food Sales = Food Cost %

Question 24

To make all of their budget periods equal, some foodservice managers create budgets consisting of

A) 7 days.
B) 21 days.
C) 28 days.
D) 30 days.

Question 25

What is the purpose of the Uniform System of Accounts for Restaurants (USAR)?

A) To reduce expenses
B) To improve revenue
C) To increase operational profits
D) To report financial results clearly

Question 26

Ideal expense in a foodservice operation is management's view of the proper amount of expense needed to produce a specific amount of sales.

Question 27

A foodservice operation's revenue will vary with both the number of guests visiting the business and the amount of money spent by each guest.

Question 28

The budget shows the actual revenue, expense, and profit of an operation.

Question 29

The sign of a good foodservice manager is that his or her actual costs are consistently lower than the amounts indicated in their budgets.

Question 30

The three ways to write a percent are: common, fraction, and decimal.

Question 31

A manager has food sales of $40,000 and food expenses of $10,000 in an accounting period. This manager achieved a food cost of 40% for the period.

Question 32

If a budget was accurate, and the foodservice operator is within reasonable limits of the budget he or she is said to be "in line" with the budget.

Question 33

The use of the Uniform System of Accounts for Restaurants (USAR) is mandatory when reporting the financial results of a food service operation.

Question 34

When calculating a fraction form percentage, the "whole" is the numerator and the "part" is the denominator.

Question 35

Foodservice managers most often face a fewer variety of challenges in their jobs than do managers of manufacturing operations.