Finance 350-Final Exam Review

Question 1

In the context of hospitality, what does C.O.G.S. likely stand for?

Accepted Answer

Cost of Goods Sold

Question 2

What are overhead costs?

Accepted Answer

Expenses that do not directly result in sales or a specific activity

Question 3

What are material costs?

Accepted Answer

Costs to create the products the business is selling

Question 4

In a bottom-up cost model, how are costs estimated?

Accepted Answer

By starting with individual components and aggregating their costs

Question 5

For which type of business might insurance be a particularly significant cost?

Accepted Answer

Tour operator

Question 6

Which of the following is a benefit of budgeting?

Accepted Answer

All of the above

Question 7

Which of the following is NOT a component of standard costing?

Accepted Answer

Sales revenue

Question 8

Which of the following is a use of budgets?

Accepted Answer

All of the above

Question 9

What is the main purpose of forecasting income?

Accepted Answer

To estimate the total amount of money that needs to be budgeted

Question 10

What is Proforma?

Accepted Answer

A method of calculating future financial performance

Question 11

What is the primary purpose of a budget?

Accepted Answer

To plan and allocate resources for future activities

Question 12

What is the base number used in vertical analysis for the balance sheet?

Accepted Answer

Total assets

Question 13

What is the main purpose of preparing a proforma income statement?

Accepted Answer

To predict future financial performance

Question 14

Which of the following best describes fixed costs?

Accepted Answer

Costs that remain constant regardless of sales volume

Question 15

Which of the following is NOT a component of vertical analysis?

Accepted Answer

Break-even point

Question 16

Which of the following is a step in developing a budget?

Accepted Answer

Setting goals

Question 17

What is a high-touch industry?

Accepted Answer

An industry with increased employee-to-customer contact

Question 18

Which statement is true about labor costs in high-touch industries?

Accepted Answer

They are often separated from total costs for efficiency analysis

Question 19

What is a key characteristic of incremental budgeting?

Accepted Answer

It adjusts the previous period's budget by a fixed percentage

Question 20

What is the main benefit of using vertical analysis?

Accepted Answer

It provides a standardized way of comparing values

Question 21

Which budgeting method involves starting at the department level and moving up to management?

Accepted Answer

Bottom-up budgeting

Question 22

Which of the following is an example of an overhead cost?

Accepted Answer

Employee benefits

Question 23

Which pricing method ensures that operating costs are covered by adding a desired mark-up?

Accepted Answer

Cost-Plus Pricing

Question 24

Which method of pricing is based on the customer's perceived value of the product?

Accepted Answer

Value-Based Pricing

Question 25

What is the main difference between finance and accounting?

Accepted Answer

Accounting looks backwards, finance looks forwards

Question 26

What is the purpose of cost modeling?

Accepted Answer

To estimate future costs of a product or service

Question 27

What does variance analysis help businesses do?

Accepted Answer

Identify areas for improvement

Question 28

Which approach to budgeting starts with high-level targets set by senior management?

Accepted Answer

Top-down approach

Question 29

Which type of cost remains constant regardless of the level of production or sales?

Accepted Answer

Fixed cost

Question 30

Which of the following is a key factor in market-based pricing?

Accepted Answer

Competitor’s pricing

Question 31

What is the purpose of setting specific standard cost goals?

Accepted Answer

To provide a benchmark for measuring performance

Question 32

In CVP analysis, what does CVP stand for?

Accepted Answer

Cost-Volume-Profit

Question 33

What is the main goal of forecasting costs?

Accepted Answer

To estimate the total amount of money that needs to be budgeted

Question 34

What does a low opportunity cost indicate?

Accepted Answer

Low benefits given up

Question 35

Which of the following is NOT an example of a high-touch industry?

Accepted Answer

E-commerce

Question 36

In menu engineering, a "dog" menu item is characterized by

Accepted Answer

Low Popularity and Low Profitability

Question 37

What is an advantage of using activity-based budgeting?

Accepted Answer

Focus on cost drivers and activities

Question 38

Why are labor costs often separated from total costs in financial analysis?

Accepted Answer

To enable management to look at efficiencies and inefficiencies

Question 39

How do variable costs behave?

Accepted Answer

They increase or decrease depending on sales volume

Question 40

Which of the following is NOT a factor that may cause variances between standards and actual costs?

Accepted Answer

Standard cost goals

Question 41

Which of the following is a key aspect of business control?

Accepted Answer

All of the above

Question 42

What is the first step in the sales forecast process?

Accepted Answer

Estimating revenue

Question 43

What is the main benefit of using percentages in financial analysis?

Accepted Answer

It provides a standardized way of comparing values

Question 44

What are mixed costs?

Accepted Answer

Costs that have both fixed and variable components

Question 45

What is the purpose of setting specific standard cost goals?

Accepted Answer

To provide a benchmark for measuring performance

Question 46

What is the primary purpose of a cost control system?

Accepted Answer

To estimate, control, and monitor business costs

Finance 350-Final Exam Review

Questions 46

Finance 350-Final Exam Review

Questions 46