PMM 6E Chp. 5

Question 1

Budget

Answer 1

A statement of estimated revenues and expenditures for a specified period of time; divided into subject categories and arranged by principal areas of revenue and expense.

Question 2

Budgeting

Answer 2

The process of planning and preparing estimated revenues and expenditures to achieve the meeting’s financial goal

Question 3

Budget Philosophy

Answer 3

Budgets must be accurate and should align with the organization’s financial goals for the meeting.

Question 4

3 Common Financial Goals

Answer 4

Profit: Revenue exceeds expenses
Break-even: Revenue equals expenses
Deficit: Expenses exceed revenue

Question 5

Incremental Budget

Answer 5

Process of creating a budget by using past budget or actual performance as a foundation and then making changes as necessary for the new budget period.

Question 6

Zero-based Budgeting

Answer 6

Process of creating a budget without the benefit of a previous year’s budget or past performance. This type depends on very good forecasting of the organization’s potential meeting revenue & expenses.

Question 7

Revenue

Answer 7

Refers to the total income generated from selling products/services over time

Question 8

Expenses

Answer 8

Costs of the products/services utilized to generate revenue.

Question 9

Net Income

Answer 9

Profit or loss…..i.e. the amount of money that remains after the payment of all expenses.
Revenue - Expenses = Net Income (profit/loss)

Question 10

Registration Fees

Answer 10

The amount payable for attendance at a conference; and may vary according to the level of participation or type of membership.

Question 11

Vendor Fees

Answer 11

Major source of revenue. Similar to exhibit sales in that each vendor’s rate depends on the size of the space allotted to the vendor.

Question 12

Sponsorships

Answer 12

Donated financial or material support, usually in exchange for recognition or a paid opportunity for an entity or exhibitor to increase its visibility at the meeting. Leading source of revenue.

Question 13

Fixed Costs

Answer 13

Day to day cost of doing business that is pre-committed such as salaries, insurance, lease expenses, utilities and so forth. FCs remain the same. Also known as non-controllable costs.

Question 14

Variable Costs

Answer 14

VCs are the expenses that vary based on various factors such as number of attendees. These are controllable costs and can be changed in the short term with increases or decreases in attendance.

Question 15

Total Costs

Answer 15

The total expenses needed to produce a meeting. It is made up of VCs plus the FCs. FC + VC = Total Cost (TC)

Question 16

Expense Budget

Answer 16

Expense Categories
Line items in each category
Quantity of each line item
Cost associated with each item
Estimated budget of each line item

Question 17

Master Account

Answer 17

An arrangement for credit between the host organization and the venue to be paid directly by the host organization. Charges to the master account should be reviewed daily and post meeting

Question 18

Analysis of Variance

Answer 18

Is conducted to determine the extent that the budgeted revenues, expenses, and profits matched the actual performance

Question 19

Variance

Answer 19

Actual line item - Budget line item = Variance

Question 20

Percentage of change

Answer 20

Actual line item - budget line item / budget line item = percent of variance