Chapter 7

Question 1

What is the process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment?

Answer 1

financial analysis

Question 2

What indicates corrective action must be taken?

Answer 2

percentage differences

Question 3

What is identification and elimination of the causes of a problem, thus preventing their recurrence?

Answer 3

corrective action

Question 4

What is the combination of food and labor costs

Answer 4

prime costs

Question 5

What budget involves all levels of the operation in the budgeting process and this tells all levels that their input is essential to the financial operation of the department

Answer 5

bottom-up budget

Question 6

What is a budget planning strategy where cost estimates are generated by working from the highest level downwards

Answer 6

top-down budget

Question 7

What type of budget is fixed on a given level of expected outputs?

Answer 7

fixed budget

Question 8

What budget is planned based on having several levels of output?

Answer 8

flexible budget

Question 9

What is used to pay a portion of costs

Answer 9

contribution to margin