Financial Management and Pricing- Final Exam

Question 1

___-___ is __ if operations are to be successful, especially with today’s economy and competitive market.

Answer 1

cost-effectivness, essential.

Question 2

Every person responsible for the financial management must ___, __ by __, what __ have ___ ___ and how they ___ with ___ ___.

Answer 2

know, day by day, transactions, taken place, compare, established goals.

Question 3

Purpose of accounting: ___ (select ___ ___), ___ (___ and ___) and ___ (prep financial __, ___ and __ them).

Answer 3

Identify (financial transactions), Record, (classify and summarize), communicate (reports, analyze and interpret them)

Question 4

Financial management is an important management function and requires ___ of ___ ___ techniques.

Answer 4

knowledge, fundamental accounting

Question 5

Financial accounting focuses on ___, ___ and ___ financial transactions that include: ___, ___, ___, ___, ___, and ___ ___.

Answer 5

recording, summarizing, and reporting, revenue, expense, profit, assets, liabilities, and owners’ equity.

Question 6

Revenue is ___ taken ___.

Answer 6

money, in

Question 7

Expense is ___ of everything required to ___ the business.

Answer 7

cost, operate

Question 8

Profit is what ___ ___ all ___ have been paid.

Answer 8

remains, after, expenses.

Question 9

Assets are ___ ___ by the business.

Answer 9

items, owned.

Question 10

Liabilities are amounts the ___ __.

Answer 10

business. owes

Question 11

Owners’ equity is the difference between ___ and ___ is equal to the ___ that ___ have on the ___.

Answer 11

assets and liabilities, claim, owners, assets.

Question 12

Uniform System of Accounts for Restaurants (USAR)- developed by the ___ ___ ___. Agreed-uopn system of __ for ___ ___.

Answer 12

National Restaurant Association, accounting, foodservice, industry.

Question 13

Large foodservice organizations (hospitals, universities) may have ___ ___ department. (Foodservice manager works with ___).

Answer 13

own, accounting. CFO

Question 14

Assets= ___+____

Answer 14

Liabilities + Equity

Question 15

Balance sheet: (____) is financial ___ of ___ of business on a given ___/___ in ___.

Answer 15

static, summary, health, date/point in time.

Question 16

Income statement: (____); financial report including: ___, ___, ___ ___ over ___ of ___.

Answer 16

dynamic, revenue, expenses, net income, period of time.

Question 17

Financial Records: ___ for ___, the ___ ___, the ___ ___ and ___ ___.

Answer 17

records, for control, income statement, balance sheet, ratio analysis.

Question 18

Careful __ ___ is essential for ___ day-to-day ___ ___ and to serve as the ___ of financial statements.

Answer 18

record keeping, monitoring, financial date, foundation.

Question 19

____ where the money is going before its gone= ___ of ___ ___.

Answer 19

knowing, responsibility, foodservice manager.

Question 20

___, ___ of ___, and ___ of ___ depends on organization. (School).

Answer 20

numbers, types of records, freq. of documentation

Question 21

Most systems are ____. 1st step is to ___ appropraite forms for data ___.

Answer 21

computerized. design, organization.

Question 22

Records for control: used to collect data on ___ ___ of ___. May be classified by ___: ___ and ___ ___, ___ and ____ records, ___ ___, ___ records, ___ and ___ records, and __ and ___ ___.

Answer 22

major phases, operation. function: purchasing and receiving records, storage and storeroom records, food production, service records, income and expense records, and sales and cash receipts.

Question 23

Purchasing and receiving records: ____ orders, ___, ___ records, ____, and ____ reports.

Answer 23

purchase, invoices, receiving, requisitions, discrepancy

Question 24

Records for control: Storage and storeroom records: ___ or ___ issue records, ____ inventory, and ___ inventory.

Answer 24

requisition, storeroom, perpetual, physical

Question 25

Food production: __, ___ recipes, ___ ___ standards, ___ ___ and ____ report, and ___ and ___.

Answer 25

menu, standardized, portion control, production schedule, leftovers, forecasts and tallies.

Question 26

Service records: used to collect and __ ___ ___ for eating occasions and individual menu items. Data= ___ ___. Used to ___ ___ of ___ per service unit for upcoming fiscal year.

Answer 26

track actual demand volume indicators predict volume business.

Question 27

Census Record-Keeping form: ___ to commercial foodservice. The "to date" figures are __ for the month. ** Example of ___ ___.

Answer 27

adaptable, cumulative, service record.

Question 28

Meal Census Summary sheet: meal count summary sheet suitable for ___ ___ ___. Example of ___ ___.

Answer 28

health care facilities, service record.

Question 29

Catering Agreement form: also serves as a record of ___ ___. Ex: of ___ ___.

Answer 29

numbers served, service record

Question 30

Income and Expense Records: record of ___ ___ is ___. (__ of ___, ___ of ___, and where ___ goes.) Several records needed to ___ info.

Answer 30

daily transactions, essential, source, income, amount, income, income. provide info.

Question 31

Sales and cash receipts: must account for ___ ___. Register= safe place for ___, gives __ ___ on number of ___ and ___ received.

Answer 31

money received, money, accurate counts, sales and cash.

Question 32

Larger organizations use cash registers of varying degrees including electronic point-of-sale (___) computer terminals.

Answer 32

POS

Question 33

POS terminals= ___ ___, ___ of ___ ___, and ____.

Answer 33

summary printouts, proof cash collected, programmable.

Question 34

___ of income from all sales and all payments for items is ___.

Answer 34

records, essential.

Question 35

No records are on any value unless: ___ ___, ___ and ___ by ___.

Answer 35

kept daily, accurate, used by management.

Question 36

The ___ ___ is a summary of financial information for a defined accounting period.

Answer 36

income statement.

Question 37

income statement: shows whether or not the business __ or ___ ___ during ___ ___.

Answer 37

made, lost, money, reporting period.

Question 38

Cost of food sold in a foodservice establishment is calculated by: ___ at ___ of ____, PLUS ___ made during ___, EQUALS ___ ___ of ___ ___, LESS ___ at ___ of ___, EQUALS ___ of ____ ___ during _____.

Answer 38

inventory, beginning, period, purchases, period, total value of available food, inventory end period, cost of goods sold during period.

Question 39

Income statement: if operation sells alcohol and food, include separate listings for sales & cost of sales for ____, ______, ____ on income statement

Answer 39

alcohol, beer, wine.

Question 40

Gross profit (income) is calculated by ____ ___ of ___ ___ from ___ or ___.

Answer 40

subtracting cost of goods sold, sales, revenue.

Question 41

New profit is calculated by ___ ___ and other ___ ___ from ___ ___.

Answer 41

subtracting, labor, operating expense, gross profit.

Question 42

Summary of profit and loss: Income; less ___ of ___ ___; equals ___ ___; less ___, ___ and ___ ___; equals ___ ___ or ___.

Answer 42

cost of food sold, gross profit, labor, overhead, and operating costs, net profit or loss.

Question 43

The ___ ___ provides information about the ___ of a ___ and how well its assets have been used to meet the financial goals of the operation.

Answer 43

balance sheet, value of a business,

Question 44

Balance sheet: listing of ___, ____, ___ on a ___ ___.

Answer 44

assets, liabilities, capital, specific fate.

Question 45

___ ___ is widely used in the foodservice industry. Various ratios are useful for ___ present ___ to a previous time period; to another company's performance; to industry averages; and/or to budgeted figures.

Answer 45

ratio analysis, comparing, performance.

Question 46

income statement figures mean little unless they can be ____ in some way.

Answer 46

compared

Question 47

Ratio= ___ ___ of ___ between ___ numbers.

Answer 47

mathematical expression, relationship, 2.

Question 48

Ratio may be presented as: ____ ___, ___, ___, and ___ ___ ___.

Answer 48

common ratio (ratio of food sales to liquor sales_, percentage (food cost as a percentage of sales), turnover (number of times inventory turns over in month), and dollars generated per seat in restaurant).

Question 49

Ratio= classified into ___. Category depends on ___ they are designed to answer. Categories are ___, ___, ___, ___, and ____.

Answer 49

categories, question. | liquidity, solvency, activity, profitability, and operating.

Question 50

Liquidity- the organization ___ to ___ its ___ when they are due.

Answer 50

able, pay, bills.

Question 51

Solvency- the organization __ to ___ its ___-___ ____ ___.

Answer 51

able, meet, long-term, financial obligations.

Question 52

Activity- how ___ is the organization ___ its ____.

Answer 52

effectively, using, assets.

Question 53

Profitability- how ___ is management in ___ ___, ___ ____ and ___ a ___?

Answer 53

effective, generating sales, controlling expenses, providing profit.

Question 54

Current ratio= ___ __ to ___ ___.

Answer 54

current assets to current liabilities.

Question 55

Liquidity:Quick (Acid-test) Ratio= ___ + ___ ___ + ___ ___ to ____ ___.

Answer 55

cash, accounts receivable, marketable securities to current liabillities.

Question 56

solvency: solvency ratio= ___ ___ to ___ ___. | Debt to equity ratio= ___ ___ to ___ ___ ___.

Answer 56

total assets to total liabilities. | total liabilities, total owner's equity.

Question 57

Activity: food inventory turnover= __ __ ___ ___/ ___ ___ ___. Avg. inventory is ___ __ __ + __ __ ___ / __

Answer 57

cost of food sold/ average food inventory. | beg. food inventory + ending food inventory/ 2

Question 58

Profitability: profit margin= __ __/ ___. return on equity= __ __/__ Return on assets: __ __/ __ __.

Answer 58

net profit/sales. net profit/equity net profit/ total assets

Question 59

Operating: sales mix- ___ __ to ___ ___.

Answer 59

food sales, beverage sales.

Question 60

Operating: average customer check= ___ __/ ___ of __ __.

Answer 60

total sales/ number of guests served.

Question 61

Operating: seat turnover= ___ ___/__ of ___.

Answer 61

covers served/ number of seats.

Question 62

Labor cost percent: cost of labor (__,___,___)/ total sales. EXAM

Answer 62

salaries, wages, benefits

Question 63

Food cost per patient or per student= ___ ___/ ___ of ___ or ___ served.

Answer 63

food cost/ number of patients, students served.

Question 64

Many factors affect ___ __ and all must be considered in order to assign financially viable menu prices.

Answer 64

menu pricing

Question 65

Manager must= ___ ___ for establishing selling price.

Answer 65

sound basis.

Question 66

Haphazard methods= ___ __ or ___ ___.

Answer 66

financial disaster, dissatisfied customers.

Question 67

Managers goal: establish menu prices that = ___ ___/___ relationship in ___ ___ and also achieve a ___ for operation.

Answer 67

good price/value customer's mind, profit.

Question 68

Common factors affecting menu pricing: ___ ___, ___ of ___, __ of ____.

Answer 68

local competition, level of service, type of customer.

Question 69

Common factors affecting menu pricing: ___ quality, ___ sizes, and ____ (prices may be higher if supported by __ __ and ___)

Answer 69

product, portion, ambiance, product quality, ambiance.

Question 70

Common factors cont: ___ period, ____, and ___ mix.

Answer 70

meal, location, sales.

Question 71

Sales mix= the freq. with which menu items are selected by ___ and may have the most ___ on setting ___ ___ prices.

Answer 71

customers, influence, realistic, menu.

Question 72

Common factors cont: __ and ___ cost, and ___ ___ ___.

Answer 72

food, labor, costs, desired, profit, margin.

Question 73

2 basic approaches to menu pricing: ___ ___ and ___ ___. Goals for both: ___ __ and __ ___ ___ in ___.

Answer 73

marketing approach, cost approach | maximize volume, maintain competitive position, market.

Question 74

Marketing approach: seeks to __ __ with ___ ___.

Answer 74

align pricing with customer expectations.

Question 75

Cost approach: considers ___ ___ and ___ ___.

Answer 75

operation's costs and profit goals.

Question 76

Common pricing methods: food cost percentage: selling price based on __ __ __ of menu items and ___ ___. Selling price appropriate for the type of ___ and the ___ ___ __ % level the foodservice wishes to maintain.

Answer 76

raw food cost, pricing factor. organization, desired food cost,

Question 77

Food cost percentage: item food cost= raw food cost +___% hidden cost. pricing factor= ___% / desired food cost percentage of the selling price.

Answer 77

10, 100

Question 78

raw food cost- found by ___ the ___ __ for each menu item.

Answer 78

costing, standardized recipe.

Question 79

Pricing factor (markup factor)- found by dividing ___ __ __ __ that the foodservice wants to maintain into ___. 100= ___ ___ or 100percent. Result is ___ or ___ ___.

Answer 79

desired food cost percentage, 100. total sales, pricing, markup factor.

Question 80

Pricing factor: cannot be used ___ to calculate ___ ___. Must account for "___" items given with meal (salt, pepper, condiments etc.

Answer 80

alone, selling price. free

Question 81

Pricing factor- ___ and ___ ___ must be accounted for. Add ___% to recipe cost before markup.

Answer 81

unproductive and hidden costs. 10%

Question 82

A food cost percentage ranging between ___% and ___% is typical.

Answer 82

25% and 45%

Question 83

ratio price: selling price= food cost/pricing ratio. Pricing ratio= food cost for a specific period of ___/ ___ for same period of time.

Answer 83

time/ sales

Question 84

Ratio price: does not consider ___ and may result in menu items being priced too ___ or too ___.

Answer 84

labor, high, low.

Question 85

Prime cost considers ___ ___ separate from __ __. Disadvantage is that it is ___-____. Advantage is that this method of pricing more accurately reflects the __ __ __ on a __-___ basis.

Answer 85

labor costs, food costs. time-consuming. direct labor cost, per-item basis.

Question 86

Percentage markup: based on an established ___ ___ ___. Advantage: __ to ___. Disadvantage: doesn't consider __ __, thus pricing may be too high or low.

Answer 86

food cost percentage, easy,apply, labor costs

Question 87

Item contribution margin- amount that remains after the __ __ of a menu is ___ from the ___ ___= ___ __ ___. Margin= amount that pays for ___ __ and other expenses and ___.

Answer 87

food cost, subtracted, selling price, item contribution margin. labor costs, profit.

Question 88

For all pricing methods, ___ ___ __ should be considered as a ___.

Answer 88

calculated selling price, guide.

Question 89

It many be necessary to ___ ___ ___ to a # that makes ___ simpler or a number that has more ___ ___ ___.

Answer 89

round selling price, transactions simpler, positive customer appeal.

Question 90

An important aspect of managerial accounting is the ___ of ___.

Answer 90

management of costs.

Question 91

Critical step of management: ___ of ____.

Answer 91

evaluation of operations.

Question 92

When operations= in line with budget no ___ is required.

Answer 92

action

Question 93

When operations dont equal with budget; review factors involved in ___ ___ and ___ ___.

Answer 93

cost control, ask questions.

Question 94

Food is most readily ___ ___ of ___. Food costs are subject to greatest ____ in ___.

Answer 94

controlled item, expenditure. fluctuation, budget.

Question 95

To control food cost, must be efficient in __ ___, ___, ___, ___ and ___.

Answer 95

menu planning, purchasing, storing, prep, serving.

Question 96

Food expenditures vary greatly due to: __ of ___ ___, amount of __-___ ___, ___ location, and ___ costs.

Answer 96

form food purchased, pn-premise, prep, geographic, delivery.