CEH - Certified Executive Housekeeper Budgeting and Inventory Control Questions and Answers — Questions and Answers
Question 1: An Executive Housekeeper is preparing the annual budget. The purchase of new, energy-efficient laundry machines would fall under which type of budget?
- Operating Budget
- Capital Budget (Correct answer)
- Payroll Budget
- Discretionary Budget
Correct answer: Capital Budget
A Capital Budget is used for significant, long-term investments and assets that have a lifespan of more than one year. New laundry machines are a major purchase and a long-term asset, making them a capital expenditure. An operating budget covers day-to-day expenses like cleaning supplies and salaries.
Question 2: A 200-room hotel aims to maintain a 4-par level for bath towels. Each room is stocked with 4 bath towels. One par is in the rooms, one par is dirty and in the laundry, and two pars are clean and in storage. What is the total number of bath towels the hotel needs in its inventory?
- 800
- 1600
- 2400
- 3200 (Correct answer)
Correct answer: 3200
To calculate the total inventory needed, first determine the number of towels for one par: 200 rooms * 4 towels/room = 800 towels per par. Since the hotel maintains a 4-par level, the total inventory is 800 towels/par * 4 par = 3200 towels.
Question 3: Which of the following inventory systems provides a real-time, continuous record of all items in stock, immediately updating with every purchase and issuance?
- Periodic Inventory System
- Manual Tag System
- Perpetual Inventory System (Correct answer)
- First-In, First-Out (FIFO) System
Correct answer: Perpetual Inventory System
A perpetual inventory system continuously tracks inventory balances, updating records automatically whenever an item is received or used. This provides real-time data. A periodic system, by contrast, updates inventory at the end of a specific period after a physical count.
Question 4: An Executive Housekeeper is analyzing the monthly Profit and Loss statement and notices that the cost of cleaning supplies is 15% over budget, while occupancy was lower than forecasted. This situation is known as a(n):
- Favorable Variance
- Unfavorable Variance (Correct answer)
- Capital Expenditure
- Zero-Based Budget
Correct answer: Unfavorable Variance
An unfavorable variance occurs when actual expenses are higher than the budgeted amount. Since the cost of supplies exceeded the budget, especially during a period of lower-than-expected occupancy, it represents a negative or unfavorable deviation from the financial plan that requires investigation.
Question 5: To effectively control housekeeping expenses, the cost for non-recycled items like guest amenities is often calculated using which key performance indicator?
- Inventory Turnover Rate
- Cost Per Occupied Room (CPOR) (Correct answer)
- Average Daily Rate (ADR)
- Revenue Per Available Room (RevPAR)
Correct answer: Cost Per Occupied Room (CPOR)
Cost Per Occupied Room (CPOR) is a standard metric used to track and control variable expenses, such as guest amenities and cleaning supplies. It directly links the consumption of these items to the hotel's actual business volume (occupied rooms), allowing for accurate budgeting and performance measurement.
Question 6: A hotel's beginning inventory of cleaning concentrate was $2,000 and the ending inventory was $1,500. The cost of goods sold (supplies used) during this period was $6,300. What is the inventory turnover ratio for this cleaning concentrate?
- 2.9
- 3.6 (Correct answer)
- 4.2
- 5.1
Correct answer: 3.6
The inventory turnover ratio is calculated by dividing the Cost of Goods Sold by the Average Inventory. First, find the average inventory: ($2,000 + $1,500) / 2 = $1,750. Then, calculate the turnover: $6,300 / $1,750 = 3.6. This means the inventory turned over 3.6 times during the period.
CEH - Certified Executive Housekeeper Budgeting and Inventory Control Questions and Answers
An Executive Housekeeper is preparing the annual budget.
The purchase of new, energy-efficient laundry machines would fall under which type of budget?