Chapter 1 Quiz

1. A restaurant budgeted for sales of $100,000 and total costs of 89%. How much profit would this restaurant earn?

• $9,000

• $10,000

• $10,500

• $11,000

The proportion or percentage of expense items to sales is known as

• total costs.

• controllable expenses.

• cost structure.

• fixed costs.

1. A restaurant has $90,000 in sales, $31,000 in food costs, $34,000 in labor costs and $24,000 in other costs. They have experienced a

• profit of $1,000.

• loss of $1,000.

• profit of $2,000

• loss of $3,000

Controlling costs is something that a manager should consider

• weekly.

• daily.

• monthly.

• only at budget time

The three key numbers managers must pay attention to when managing costs are

• generated sales, total variable and fixed costs.

• generated sales, controllable costs and noncontrollable costs.

• generated sales, expenses and taxes.

• generated sales, costs incurred to produce these sales, and profits.

Costs that remain the same regardless of sales volume are known as

• fixed costs.

• variable costs.

• semivariable costs.

• noncontrollable costs.

A restaurant experiences a 3% increase in sales based on their budget. This restaurant should also expect to see a 3% rise in

• fixed costs.

• profits.

• variable costs.

• expenses.

Labor is an example of a

• fixed cost.

• semivariable cost.

• variable cost.

• controllable cost.

Wages are an example of a

• noncontrollable cost.

• fixed cost.

• controllable cost.

• variable cost.

An operation has signed a lease in which they will pay $4,000 per month plus 1% of sales. For this operation this lease represents a

• semivariable cost.

• fixed cost.

• variable cost.

• controllable cost.