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RD Exam > Domain III: Management of Food and Nutrition Programs and Services: Financial Management > Flashcards

Domain III: Management of Food and Nutrition Programs and Services: Financial Management Flashcards

1
Q

The purpose of the budgeting process and fiscal periods is to give managers a basis for _____ in the estimate of future needs

A

Control

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2
Q

The budget must be ____ and adjustable according to change; usually reviewed monthly

A

Flexible

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3
Q

An _____ budget is a forecast of revenues, expenses, and profit for a specific period of time

A

Operating

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4
Q

The first step of developing an operating budget is to create a forecast of ____ or ____ portion

A

Sales or revenue

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5
Q

The second step of developing an operating budget is to budget ____ (labor, food, operating expenses) related to the projected level of revenue

A

Expenditures

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6
Q

A ____ budget projects revenue and expenses, showing inflow and output of cash

A

Cash

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7
Q

The purpose of a cash budget is to determine if ____ will be available when needed

A

Funds

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8
Q

A _____ budget is used in plant facilities, for equipment, cost of improvements and repairs, expansions, replacements, etc

A

Capital

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9
Q

The capital budget includes expenditures whose returns are expected to last beyond ___ year

A

One

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10
Q

A ___ ___ statement (hypothetical) projects expected income, expenditures, and profit

A

Pro forma

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11
Q

A ____ (incremental, baseline) method to establish line items in a budget uses the existing budget as a base and projects changes for the ensuing year in relation to the current budget

A

Traditional

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12
Q

A traditional budget usually begins with this year’s expenses plus an ____ factor

A

Inflation

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13
Q

A traditional budget is ___-oriented

A

Control

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14
Q

A traditional budget is prepared at one level of ____ or ____

A

Sales or revenue

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15
Q

A ____ ____ budget begins at 0 and must justify each expense (more planning required)

A

Zero-based

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16
Q

One example of a zero-based budget is a ___, ___ budgeting system

A

Planning, programming

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17
Q

With a Planning, Programming Budgeting System, past dollar ____ are NOT the basis of projections

A

Allocations

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18
Q

A zero-based budget is ____-oriented

A

Planning

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19
Q

A ____ budget is prepared at one level of sales or revenue (no expected major change in patient or customer count during the year)

A

Fixed

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20
Q

A ____ budget is adjusted to various levels of operation with varying levels of sales or revenue throughout the year (changes in patient or customer count)

A

Flexible

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21
Q

A flexible budget might account for something like…

A

-Closing a floor for renovation

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22
Q

A flexible budget gives a dollar range for ____ to ____ levels of predicted activity

A

Low to high

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23
Q

A _____ budget details what it costs to perform an activity (how much to supervise the trayline)

A

Performance

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24
Q

____ (fixed) costs are not affected by sales volume (number of people served) and is not directly evident in day-to-day activities

A

Indirect

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25
Q

Indirect costs are required for a business to exist even if it produces ____; cannot be readily changed

A

Nothing

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26
Q

Examples of indirect costs:

A

-Rent
-Taxes
-Interest on debt
-Insurance
-Depreciation

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27
Q

Indirect costs stay ____ within a range of sales volume

A

Fixed

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28
Q

_____ is the cost associated with the acquisition and installation of a fixed asset and how they are allocated over the estimated useful life of the asset

A

Depreciation

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29
Q

____ ____ depreciation gives annual depreciation

A

Straight line

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30
Q

Formula to calculate straight-line depreciation:

A

(Value of the equipment (cost) - salvage value) / (# of years of useful life)

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31
Q

______ depreciation is the total depreciation up to a given date, subtracted from the original cost of the item

A

Accumulated

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32
Q

Accumulated depreciation is included in the ____ assets

A

Fixed

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33
Q

Direct, variable, and flexible costs vary directly with changes in ____ (revenue); directly involved in service to the customer

A

Sales

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34
Q

Examples of direct, variable, and flexible costs:

A

-China
-Silver
-Food
-Uniforms
-Laundry
-Repairs
-Benefits

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35
Q

___-__ costs have both a fixed and a variable component

A

Semi-variable

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36
Q

With sem-variable costs, a portion of the cost will remain fixed regardless of changes in ___ ___

A

Sales volume

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37
Q

Examples of semi-variable costs:

A

-Labor
-Maintenance
-Utilities

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38
Q

Semi-variable costs are divided into fixed and variable components before doing ___-___ analysis

A

Break-even

39
Q

_____ costs are already incurred and cannot be recouped by a new decision or alternative

A

Sunk

40
Q

An example of a sunk cost is:

A

The cost involved in studying the merits of a new computer

41
Q

_____ costs are the amount of increase or decrease in cost when you compare alternative choices

A

Differential

42
Q

An example of a differential cost is…

A

The difference in cost between two meal delivery systems

43
Q

____ ____ is the efficient allocation of people, materials, and equipment to meet the needs of the operating system (can lead to cost savings)

A

Resource allocation

44
Q

The ___ ___ ____ helps plan and control an operation; it identifies the most critical activities in order to best allocate limited resources

A

Critical Path Method

45
Q

Food costs are the most readily controlled item, and are subject to the greatest ____ in cost

A

Fluctuation

46
Q

____ planning is the most important part of controlling food costs

A

Menu

47
Q

The type of service also impact food costs; a ____ menu reduces waste and costs

A

Selective

48
Q

____ buying of food reduces food costs

A

Group

49
Q

To reduce food costs, there must be receiving control; weight-in and check items against the ____

A

Invoice

50
Q

____ and ____ of food should also be tightly controlled in order to reduce food costs

A

Storage and production

51
Q

____ portions can be used to control costs and for customer satisfaction; keep records of employee meals

A

Standard

52
Q

Labor costs are less ____ than food costs

A

Controllable

53
Q

Operating costs usually make up ___-___% of the budget; they include things like utilities, laundry, etc

A

12-18

54
Q

____ ____ accounting recognizes a transaction at the time the cash is taken in or released

A

Cash basis

55
Q

____ ____ accounting recognizes revenues when earned and expenses when incurred (regardless of when the actual cash is received or dispersed)

A

Accrual basis

56
Q

A ____ ____ records and reports transactions categorized by account numbers; includes a summary of all expenses and revenues for the month by category (meat, fruit, dairy)

A

General ledger

57
Q

An income statement, profit and loss statement, and revenue and expense statement show ____ results over a period of time (dynamic)

A

Operating

58
Q

Income statements, profit and loss statements, and revenue and expense statements present the income (revenue), expenses, and profit over the course of the ____ ____

A

Budget period

59
Q

Income statements, profit and loss statements, and revenue and expense statements analyze operational _____

A

Effectiveness

60
Q

A ____ ____ shows the financial condition as of a particular date (static); it lists assets and liabilities

A

Balance sheet

61
Q

Examples of assets:

A

-Cash
-Inventory
-Accounts receivable

62
Q

Accounts receivable is money ____ to you

A

Owed

63
Q

Liabilities are moneys you ___ to someone

A

Owe

64
Q

Assets are equal to ____ + ____

A

Liabilities plus capital (equity, owner’s interest)

65
Q

A balance sheet analyzes operational ____; it is a quick way to view financial condition

A

Effectiveness

66
Q

Financial ____ use formulas to analyze an organization’s financial position

A

Ratios

67
Q

Formulas use data from ____ ____

A

Financial statements

68
Q

Financial formulas compare the ____ with similar ones

A

Organization

69
Q

Financial formulas also compare ratios with those ____ or with ____ ratios

A

Projected; preceding

70
Q

_____ ratios assess the ability to meet short-term debt (pay bills when due)

A

Liquidity

71
Q

Liquidity ratios assess current ____ with current ____ (current: within 12 months)

A

Assets; liabilities

72
Q

____ ____ ratios assess the ability to meet long-term debt (solvency)

A

Net worth

73
Q

Next worth ratios assess ____ assets and ____ liabilities (debt to asset ratio)

A

Total; total

74
Q

_____ ratios (asset management) show current effectiveness of inventory control (answers the question of whether you are efficiently using the assets to produce more income?)

A

Turnover

75
Q

The inventory turnover rate is equal to the…

A

Cost of sales (food cost) / average inventory cost

76
Q

Cost of goods sold is a measure of how often inventory is ____ and ____

A

Consumed and replenished

77
Q

A turnover rate of ____-____ times per month is often desireable

A

2-4

78
Q

A high turnover rate indicates a ____ inventory is being kept

A

Limited

79
Q

A low turnover rate indicates that large amounts of money are tied up in ____

A

Stock

80
Q

The daily food cost report (food cost percentage) indicates what percentage of the income was spent on ____ sold

A

Food

81
Q

The food cost percentage is equal to…

A

Daily food cost / daily income

82
Q

The food cost per meal is equal to…

A

Food cost per month / # meals per month

83
Q

Food cost is equal to food ____ plus foods removed from ____

A

Purchased; inventory

84
Q

To determine food cost, you need to know…

A

-# meals served
-Food purchases
-Foods removed from inventory

85
Q

The ____ ____ is the most commonly used assessment of overall financial efficiency

A

Profit margin

86
Q

The profit margin reflects the portion of ____ ____ remaining after paying all expenses

A

Sales volume

87
Q

Formula for determining the profit margin:

A

Net profit (profit after all expenses have been paid) / sales dollars (revenue)

88
Q

____ includes income from patients, cafeteria sales, and catering sales

A

Revenue

89
Q

The cost of ____ is the cost of raw food and beverages sold

A

Sales

90
Q

The ____ profit is the profit shown after deducting raw food and beverage costs (cost of sales) from sales (revenue)

A

Gross

91
Q

The ____ profit is the profit shown after ALL expenses have been deducted from sales

A

Net

92
Q

A ____ ____ determines the length of time it will take for the cash inflows from a project to equal the initial cash outlay (how much time it will take for an investment to pay back the organization for the investment)

A

Payback period

93
Q

To determine the payback period…

A

-Add up the costs of the service
-Add up the costs saved by using the new service
-Divide the costs of the service by dollars saved

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