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managerial accounting
Managerial Accounting for the Hospitality Industry 2nd edition Lea R. Dopson, David K. Hayes - Solutions
Over the past 100 years, total stock market investment returns have averaged approximately a. 11% per year.b. 31% per year.c. 1.1% per year.d. 3.1% per year.
An individual invests $100,000 in a business at the beginning of the year. At the end of the year the total value of the investor’s investment has grown by 7.5%. What is the value of this individual’s investment at the end of the year? a. $107,500b. $100,000c. $117,500d. $7,500
A hotel manager prepares a flexible rooms expense budget for the next accounting period based on an ADR of $125.00 and 40,000 room nights sold. The manager achieves a $125.00 ADR but actually sells 45,000 room nights. What will most often be true about this manager’s performance when compared to
A restaurant manager estimates his total labor cost for next month to be 30% of forecasted revenue. Employee benefits are estimated to be 18% of total labor costs. The manager forecasts next month’s total revenue to be $75,000. What would be amount of this manager’s fore-casted employee
A bar manager estimates her next month’s beverage revenue will be $85,200. The bar manager forecasts her Cost of Sales: Beverages for next month to be 22%. What would be amount of this manager’s fore-casted Cost of Sales: Beverages for next month? a. $18,744b. $38,727c. $18,944d. $38,927
Which is another name for the individual expense categories listed on an operating budget?a. Line itemsb. Cost centersc. Profit centersd. Mixed costs
Which is an external factor that could directly impact the development of a hotel manager’s annual operating budget? a. The opening of a nearby hotel by a major competitorb. The replacement of the hotel’s revenue managerc. A reduction in the hotel’s targeted ADRd. The implementation by
When preparing an operations budget, what is true about historical operating data? a. It should be considered in conjunction with recent operating data.b .It is less important than recent operating data.c. It is more important than recent operating data.d. It should only be considered if
Which type of budget estimates balance sheet results?a. Capitalb. Cashc. Operationsd. Achievement
Which type of budget is always of a limited time duration; such as a day, a week, or a month?a. Achievementb. Long-rangec. Cashd. Perpetual
Rather than preparing an annual budget, a manager prepares 28-day budgets. How many such budgets will the manager produce for a single year’s operations?a. 13b. 26c. 12d. 24
Which type of budget would provide management with the LEAST amount of detail? a. Long-range budgetb. Annualc. Achievementd. Cash
The two most common methods of classifying different types of budgets are by their length and a. Purpose.b. Amount.c. Horizon.d. Complexity.
Jennifer Norton is the Registered Dietitian (R.D.) responsible for all dietary services at City Memorial Hospital. Her operation consists of two departments. The first, and largest, is patient feeding. It consists of the tray line staff and the majority of her food production staff. The second
“We just don’t have the money,” said Bill, the controller for the 400‐room Lafayette Square hotel. Bill was attending the meeting of the hotel’s Executive Operating Committee and he was informing Wendy, the hotel’s general manager, and the other EOC members that a $120,000 spring
If a hospitality operation’s sales are too low, total revenuea. May be insufficient to cover fixed and variable costs.b. Will cover fixed, but not variable costs. c. Will cover variable, but not fixed costs.d. May create profits, but may still not cover fixed costs.
It had been an exhausting two weeks, but JoAnna Taubman was very pleased with the way her hotel staff had performed. From tornado watch, to warning, to the too close for comfort sighting of a tornado that had missed her full‐service hotel by only two miles, her team was understandably nervous
“You’ve got to be kidding me!” said Amit Chopra, owner of the 215‐room Comfort Express in Jamestown.“No, I’m not kidding. He sold them all,” replied Sylvia Zepeda, the hotel’s director of sales and marketing.Together, Amit and Sylvia served as the hotels revenue management team. It
A restaurant manager is creating a trend line for use in estimating his future revenue levels. The manager wants to use the last eight years of his operation’s revenue for his regression analysis, but the data from year number five is missing. What is true in this scenario? a. The manager
Which is another name for the “baseline data” used in the development of a trend line when a manager employs regression analysis?a. Known datab. Unknown datac. Fore-casted datad. Appraised data
A regression analysis is prepared using a. One dependent and multiple independent variables. b. Multiple dependent and multiple independent variables.c. One dependent and one independent variable.d. Multiple dependent and one independent variable.
The primary business purpose of using regression analysis in the creation of a trend line is toa. Predict future (unknown) values.b. Predict past (known) values.c. Match expenses to revenues.d. Establish selling prices.
A hotel has 400 available rooms. On Monday night the hotel’s revenue manager forecasts 80 stay over’s, 175 arrivals, 10 no-shows, 25 walk-ins, and 10 early departures. What will be this revenue manager’s fore-casted occupancy % for Monday night? a. 65%b. 60%c. 70%d. 75%
A hotel has 300 available rooms. On Tuesday night the hotel’s revenue manage forecasts 50 stay over’s, 125 arrivals, 15 no-shows, 10 walk-ins, and 5 early departures. What will be this revenue manager’s occupied rooms forecast for Tuesday night? a. 165b. 175c. 145d. 155
In the hotel industry, which type of forecast may often exceed 100%?a. Demand forecastb. Occupancy forecastc. Revenue forecastd. Variable expense forecast
Which is one important purpose of a hotel’s rooms occupancy forecast?a. Helping to improve employee schedulingb. Helping to manage the hotel’s cash flowc. Identifying periods of low room demandd. Identifying periods in which occupancy will exceed 100%
When a hotel’s room revenue forecasts are consistently and unrealistically too low theya. Result in under-aggressive room rate determinations and rates that are set too low.b. Cause unrealistic high profit expectations by the hotel’s ownersc. Produce budgeting/ spending errors by overstating
A restaurant manager served 3,000 guests last January. For this coming January she predicts a decrease in guests served of 8.0 %. What will be the number of guests this manager will forecast to serve this coming January? a. 2,760b. 2,240c. 3,760d. 3,240
A restaurant manager achieved $72,500 in revenue last January. For this coming January she predicts a 5.5% increase in monthly sales. What will be this manager’s revenue forecast for this coming January? a. $76,488b. $78,488c. $74,488d. $72,488
A restaurant manager’s operation achieved sales of $72,500 last January, and sales of $77,250 this January. What was this manager’s percentage change in sales this January compared to last January? a. 6.55%b. 6.15%c. (6.15%)d. (6.55%)
The number of guests served, hours worked or wages paid, sales revenue generated, and hours of operation are all examples of common methods used by managerial accountants to allocatea. Joint costs.b. Fixed costs.c. Overhead costs.d. Step costs.
Which is the opposite of incurring an expense? a. Incurring an opportunity costb. Incurring a fixed costc. Incurring a mixed costd. Incurring a step cost
When they are calculated as a percentage of sales, a hospitality operation’s costs area. Reduced when sales are high and are increased when sales are low.b. Reduced when sales are high and stay the same when sales are low.c. Increased when sales are high and are reduced when sales are low.d. Stay
When an operation’s total fixed and variable costs a. Equal its revenue, the breakeven point has been reached.b. Are greater than its revenue, the break even point has been reached. c. Are less than its revenue, the break even point has been reached.d. Equal to its opportunity costs,
Prior to conducting a cost/volume/profit preparing analysis, a restaurant manager musta. Develop a contribution margin income statement.b. Prepare an up-to-date balance sheet.c. Develop an income statement in USAR format.d. Identify the operation’s step-costs vs. its non-step costs.
Which is the formula that managers use to calculate their break even point in sales dollars?a. Fixed Costs / Contribution Margin % = Break even point in sales dollarsb. Fixed Costs x Contribution Margin % = Break even point in sales dollarsc. Contribution Margin % / Fixed Costs = Break even point
A hotel pays an income tax rate of 28% on its profits. The hotel seeks an after-tax profit of $40,000 per month. Rounded up to the nearest dollar, what is the amount of before-tax profit the hotel must achieve each month to meet its after-tax profit goal?a. $55,556b. $58,556c. $61,556d. $52,556
A manager is considering staying open one extra hour per day and wants to calculate his minimum sales point (MSP). The manger’s variable costs are 40%, food costs are 30%, and fixed costs are 60%. The minimum labor cost for staying open one extra hour is $125.00. Rounded up to the nearest dollar,
A restaurant manager wishes to calculate her minimum sales point (MSP) when considering whether she should remain open one extra hour per day. Which will NOT be required for her to compute to make the proper MSP calculation? a. Fixed cost %b. Food cost %c. Variable cost %d. Minimum payroll
A restaurant averages sales of $120,000 when serving 20,000 guests. The restaurant’s variable costs when serving 20,000 guests is $90,000. The contribution margin per guest is $1.50. Fixed monthly costs are $ 50,000. What is this restaurant’s monthly breakeven point in sales dollars? a.
In the hospitality business, sales volume is defined as the a. Number of units sold.b. Number of guests served.c. Amount of gross revenue generated.d. Amount of net revenue generated.
Each member of a restaurant operator’s wait staff can serve 30 guests per each hour worked. The operator anticipates serving 210 guests tomorrow between noon and 1:00 p.m. How many servers must be scheduled between noon and 1:00 p.m. tomorrow to serve the number of anticipated guests? a. 7b.
In most cases, performance forecasts that are made far into the futurea. Will require modification.b. Will be highly accurate.c. Are most useful than shorter term forecasts.d. Are of little to no value to operators.
In which scenario would a forecast most likely be inaccurate because of its intended purpose? a. When it is developed to make management look good to a business’s owners.b. When it is developed based primarily on historical data. c. When the time period it addresses is in the very near
What is the name for a directional move of data over an identified time period?a. Trendb. Increasec. Decreased. Flow
Based on the following data, what would be this operation€™s two-day weighted check average?a. $9.71b. $8.00c. $16.00d. $12.29 Revenue Guests Average Sale Served Per Guest 250 Saturday Sunday $2,000 $ 1,400 $8.00 $14.00 100
Intentionally underestimating revenue when preparing a budget is known asa. Low-balling.b. Forecasting.c. Projecting.d. Predicting.
Which is the name for restaurant and hotel industry initiatives designed to increase revenues by selling buyers more, or higher priced, items than they originally intended to purchase?a. Up selling programsb. Orientation programsc. Forecasting programs d. Positioning programs
Which operation would be most likely to experience a seasonal sales trend?a. Ski resortb. Downtown business hotelc. Suburban business hoteld. Select-service highway hotel
Which is the foundation of an accurate hotel sales forecast?a. Sales historyb. Budgetc. Number of rooms currently “on the books”d. Current guest arrival list
Each of the following operations would likely use a non-revenue approach to sales forecasting EXCEPTa. A food service operation located in a mall’s food court.b. A student housing facility located on the campus of a large university.c. An extended care facility housing elderly residents. d.
Which formula is used to calculate a restaurant’s check average?a. Total sales / Number of guests servedb. Total sales x Number of guests servedc. Total sales - Number of guests servedd. Total sales + Number of guests served
Which is an example of a non-controllable cost? a. Laundry equipment depreciationb. Housekeeping salariesc. Housekeeping wagesd. Linen cost per occupied room
A regional director of marketing allocates her $12,000 per month salary to three properties she supervises. The allocation is based upon each property’s room count. Hotel A has 450 rooms. Hotel B has 375 rooms. Hotel C has 550 rooms. How much of the regional marketing director’s monthly salary
Which is another term used to describe an overhead cost? a. Indirect costb. Fixed costc. Mixed costd. Step cost
Which is an example of an indirect labor cost?a. Wages for gardeners and landscapersb. Salaries for F&B managersc. Wages for front desk agentsd. The Executive Housekeeper’s monthly salary
Which is an example of a step cost?a. Wait staff wagesb. Liability insurance costs c. Food costsd. Mortgage payments
A hotel has daily fixed room cleaning costs of $4,500. The hotel’s variable cost for room cleaning is $22.50 per room. What would be the hotel’s total room cleaning costs on a day when 175 rooms are to be cleaned? a. $8,4327.50b. $4,522.50c. $3,937.50d. $4,500.00
A restaurant pays its website developer a monthly fee for hosting and maintaining its web presence. The monthly fee charged by the developer is $400, plus $0.003 per site click. What would be the restaurant’s total cost for last month if 24,000 internet users visited (clicked on) the
Which is the best example of a mixed cost in the hotel industry?a. Cost of the telephone systemb. Cost of the Executive Housekeeperc. Cost of pest extermination servicesd. Cost of bars of soap placed in guest rooms
Which is the formula used to calculate variable cost per guest (VC/Guest)?a. Total variable costs / Number of guestsb. Number of guests / Total variable costsc. Total semi-variable costs / Number of guestsd. Number of guests / Total semi-variable costs
A variable cost is one thata. Increases as volume increases and decreases as volume decreases. b. Increases as volume increases and increases as volume decreases.c. Decreases as volume increases and decreases as volume decreases.d. Is unaffected by changes in volume.
Which business cost will increase as a restaurant’s volume increases? a. Napkin costsb. Mortgage costc. Lighting costsd. Insurance costs
A restaurant achieved sales of $85,000 last month. The restaurant’s total expenses for last month were $55,550. What was the restaurant’s profit last month? a. $29,450b. $49,000c. $55,550d. $85,000
Restaurant operators must know their costs before they can a. Establish their menu prices.b. Fill vacant staff positions.c. Design employee orientation programs.d. Select their product vendors.
A business’s costs are synonymous with its a. Expenses.b. Revenue.c. Gross profit.d. Net profit.
At any specified level of revenue, a. The lower a business’s costs, the greater are its profits.b. The lower a business’s costs, the lower are its profits.c. The greater a business’s costs, the greater are its profits.d. A business’s costs will have no impact on its profits.
“I think I can buy it at a great price,” said Dan Flood. He was talking about the Watershed Restaurant. The property was for sale and Dan was meeting with Loralei Glenn, his friend and an experienced restaurant manager. “It’s losing about 7 cents on each dollar sale now,” continued Dan,
“I think we have to do it,” said Paula, the director of operations for the five‐unit Hungry Henry’s pizza chain. Paul was talking to Henry Acosta, the chain’s founder.Paula and Henry were discussing the fact that their competitors in the area had extended their hours of operation. Instead
A hotel’s F&B department will host a banquet for 100 guests. The guests are to be charged $75.00 per person for food and $35.00 per person for alcoholic beverages. The service charge for the event will be 20%. What is the amount of food and beverage income (revenue) that will result from
Which is NOT an example of ancillary revenue in a hotel?a. Roll away bed rentalsb. Parking feesc. Interest incomed. Golf fees
In the select (limited) service segment of the hotel industry, non-room revenue typically accounts for what percentage of total revenue? a. 5-20%b. 20-50%c. More than 50%d. Less than 5%
As used in the hotel industry, what is another name for “ancillary revenue?”a. Non-room revenueb. Food and beverage revenuec. Meeting room revenued. Marketing-related revenue
A hotel has 400 rooms. Last night 5 rooms were out of order. Last night the hotel sold 300 rooms at an ADR of $215.00. What was the hotel’s RevPAR last night? a. $163.29b. $163.25c. $161.29d. $161.25
A hotel receives a room reservation that indicates the guest making the reservation will pay $200.00 for her one night stay. The hotel pays a 15% travel agent commission for the reservation, and the hotel’s franchisor will assesses total fees of 12% for the reservation. What is the hotel’s net
GOPPAR is best defined as a hotel’s a. Revenue less management controllable costs per available room.b. Revenue less management controllable costs per sold room.c. ADR x RevPAR.d. ADR x RevPAR x Occupancy %.
Flow through is calculated to help hotel managers identify a. The impact of increases in revenue on GOP.b. The impact of increases in revenue on CPOR.c. The effect of cost cutting on profitability GOP.d. The effect of decreases in ADR on RevPAR.
A hotel had a GOP of $125,000 this accounting period and a GOP of $100,000 the previous accounting period. Total revenue was $300,000 the previous period and $350,000 this period. What was this hotel’s flow through? a. 50%b. 55%c. 60%d. 45%
Which is the formula used to calculate flow-through? a. (GOP This period – GOP Last period) / (Total Revenue This Period – Total Revenue Last Period)b. (GOP This period + GOP Last period) / (Total Revenue This Period – Total Revenue Last Period)c. (GOP This period – GOP Last period) /
What is subtracted from the numerator when calculating Net ADR Yield?a. Reservation generation feesb. Average cost per occupied room (CPOR)c. ADRd. The hotel’s yield percentage
Which best describes the concept of flow-through in the hotel industry? a. A measure of the ability of a hotel to convert increased revenue dollars to increased gross operating profit dollars b. The net number of guests who check into and out of a hotel in one day c. A measure of the
When managers utilize a food cost percentage approach to menu item pricing they are basing their prices on the idea that food cost should bea. A predetermined percentage of selling price.b. Less than 25%.c. Equal to an item’s contribution margin.d. Less than an item’s contribution margin.
Which is the pricing factor a manager would use if she wanted to achieve a 40% food cost on all of her menu items?a. 2.5b. 3.0c. 3.5d. 2.0
Which is the formula utilized by managers to price a menu item utilizing a pricing factor? a. Pricing factor x Item food cost = Item selling priceb. Pricing factor + Item food cost = Item selling pricec. Selling price x Pricing factor = Item food costd. Selling price + Pricing factor = Item
Which is another term for contribution margin? a. Item gross profit marginb. Profitc. Net profit d. Profit percentage
A hotel includes “comp” rooms in the calculation of its occupancy %. The hotel has 300 rooms. Last night the hotel sold 215 rooms and had 12 comp rooms. What was the hotel’s occupancy % last night? a. 75.7%b. 77.7%c. 73.7%d. 71.7%
Which is the best description of an individual hotel’s competitive set?a. Hotels with which the individual hotel directly competesb. Hotels that offer the same rate as the individual hotelc. Hotels located in close proximity to the individual hoteld. Hotels with the same brand affiliation as the
A menu item sells for $4.99. The recipe for the item makes 24 servings and it costs $52.56 to make the full recipe. What is the contribution margin for one serving of this item?a. $2.80b. $2.19c. $4.80d. $4.19
What is the mathematical relationship between selling price, food cost %, and contribution margin?a. Selling price x (1.00 – Food Cost %) = contribution marginb. Selling price ÷ (1.00 – Food Cost %) = contribution marginc. Selling price x (1.00 + Food Cost %) = contribution margin d.
Which is a factor used in the food cost %, contribution margin, and goal value analysis methods of menu analysis? a. Popularityb. Food cost %c. contribution margind. Variable costs
When using the food cost percentage matrix method of menu analysis, a menu item with which of the following characteristics would be most desirable?a. Low food cost %, high popularityb. Low food cost %, low popularityc. High food cost %, high popularityd. High food cost %, low popularity
When using the contribution margin matrix method of menu analysis, a menu item with which of the following characteristics would be most desirable?a. High contribution margin, high popularityb. High contribution margin, low popularityc. Low contribution margin, high popularity d. Low
The majority of nonfood variable costs assigned to menu items isa. Labor costs.b. Marketing costs.c. Utilities costs.d. Occupancy costs.
What is another name for conducting a menu analysis when using the contribution margin approach? a. Menu engineeringb. Goal value analysis c. Food cost analysisd. Weighted average analysis
A common and legitimate criticism of the contribution margin approach to menu analysis is that it favorsa. Higher priced menu items over lower priced items.b. Lower priced menu items over higher priced items.c. Higher food cost percentage items over lower cost percentage items.d. Lower food cost
“Let me make sure I understand this. You want to set the rates for the third week in October at full rack, close out all discounts, and immediately block any inventory we are not contractually obligated to provide our discount intermediaries,” said Amanda, the front office manager at the
Bill O’Leary could see both sides of the issue. As the general manager of the 500‐unit Plazamar Hotel, he knew how important it was to remember that both members of his room revenue management team now sitting across his desk shared the same goals. What Elizabeth Sipes was asking for, he
In the short run, when room supply is held constanta. A decrease in demand for rooms typically leads to a decreased selling price.b. A decrease in demand for rooms typically leads to an increase in selling price.c. An increase in demand for rooms typically leads to a decreased selling price.d.
A rack rate is best understood as the price of a hotel’s a. Rooms when no discount is offered.b. Rooms when discounts are offered.c. Most expensive room types.d. Least expensive room types.
In the hotel industry, package rate refers to a a. Group of hotel products and services sold for one price.b. Room rate discount offered to members of a consortium.c. Room that is sold at full, or “rack” rate.d. Room sold using a fade rate.
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