Budgeting and Inventory Control Flashcards

Which budgeting method requires every expense to be justified from zero each budget period?

Answer: Zero-based budgeting

Zero-based budgeting starts from zero and requires justification for every line item rather than basing it on prior-year spending.

A hotel's housekeeping department spends $12,000 on linens annually. If the property has 200 rooms, what is the annual linen cost per room?

Answer: $60

$12,000 divided by 200 rooms equals $60 per room annually.

What does the term 'par stock' refer to in housekeeping inventory management?

Answer: The minimum quantity needed to meet operational needs between deliveries

Par stock is the standard quantity of items needed to support daily operations until the next scheduled delivery.

Which cost is BEST classified as a fixed cost in a housekeeping department budget?

Answer: Department supervisor salary

A supervisor's salary remains constant regardless of occupancy levels, making it a fixed cost.

An executive housekeeper notices actual supply costs are 15% above budget. What is the FIRST step to take?

Answer: Analyze the variance to identify the root cause

Variance analysis identifies whether the overage is due to price increases, waste, theft, or inaccurate forecasting before corrective action is taken.

What is the purpose of conducting a physical inventory count in housekeeping?

Answer: To verify actual stock levels against recorded quantities

A physical inventory count reconciles what is actually on hand with what inventory records show, identifying discrepancies.

Which formula is used to calculate the inventory turnover rate for housekeeping supplies?

Answer: Cost of goods sold ÷ Average inventory

Inventory turnover rate equals cost of goods sold divided by average inventory, showing how frequently stock is used and replenished.