1. Which of the following is (are) not external factors to be taken into account when estimating future revenues?
a) Inflation rates for the coming year
b) Changes in competitive conditions
c) Leisure and business travel trends
d) Upcoming events in the local area
e) Changes in political attitudes
f) Changes in legislation
g) Changes in supplier service contracts
h) New employers in the area
i) Existing employers having difficulties or going out of business
j) None of them
2. A hotel operation budgeted annual revenues of €10,500,000 and achieved revenues of €10,850,900. The percentage variance was:
a) 3.2%
b) 3.3%
c) 3.4%
3. Which of the following is (are) not correct in the context of Activity Based Budgeting?
a) Allows revenue to be estimated for each individual guest
b) Enables costs to be estimated based on increases and decreases in forecast levels of revenue
c) Is typically of benefit when estimating costs related to room occupancy
d) Can provide useful information in a TQM environment by relating the cost of an activity to service levels
4. Which of the following is (are) correct in the context of Zero Based Budgeting (ZBB)?
a) Enables companies to be more precise about matching their resource requirements with the strategic aims of the organization.
b) The people who prepare budgets review every project and area of expenditure at the beginning of each budget cycle and must justify each line item in order to guarantee performance-based individual bonuses.
c) The main benefits are the clarity that it can bring to the final budget output, the justification for costs of all types and the alignment of the budget with strategy.
d) Special training may be required, which is in itself an additional cost that will need to be justified as part of a ZBB approach.
e) All of them
5. A hotel has 65 full time employees and 25 seasonal employees (equivalent to 15 FTEs). The budgeted total annual cost of the HR department is €300,000, of which €250,000 relates to fixed salaries. How much HR cost per FTE per year should be allocated to other departments in the operations budget for the purposes of establishing a KPI for the HR department?
a) 3.125
b) 3.750
c) 3.333
d) 2.777