21 A price variance occurs when there is a difference between the budgeted price and the actual selling price.

Select one:

True

False

22 A static budget is a budget is prepared using budgeted selling prices, budgeted costs and actual sales volume.

Select one:

True

False

23 Cost of capital is the minimum rate of return that owners or investors expect from a capital expenditure.

Select one:

True

False

24 The sales budget forecasts plans for acquiring and selling capital assets.

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True

False

25 Target costing is the process of using selling and administrative costs to determine the cost of a service?

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True

False

26 A budget is a numerical tool, usually expressed in terms of money that helps managers reach the financial goals in their business plans.

Select one:

True

False

27 One of the common types of hospitality business decisions that are based on relevant cost principles is:

To show that there is a market for the business

To track costs incurred and can never be recovered

To track room inventory

To keep or drop a product or service

28 An example of a capital expenditure is:

New hotel furniture

Wine for the restaurant

Tools for maintenance

Housekeeping supplies

29 Sunk costs are sometimes relevant to a decision.

Select one:

True

False

30 Markup is the difference between a product's selling price and its cost.

Select one:

True

False