Chapter 2 Exam Questions Creating Sales Forecasts

Chapter 2

Creating Sales Forecasts

Multiple Choice Exam Questions

1. A sales forecast estimates both the number of guests to be served in a specific time-period and the
2. time required to serve them.
3. amount each guest will spend.
4. profits made in that time period.
5. expenses incurred in that time period.
6. What does a foodservice operation’s POS system record?
7. Only the operation’s sales volume
8. Only the customers’ payment information
9. Both sales volume and customer payment information
10. Sales volume, customer payment information, and profits
11. What is the foodservice industry term for the amount of money that results when a manager adds the sales of today to the sales of all prior days in a reporting period?
12. Annual sales
13. Daily revenue
14. Sales variance
15. Sales to date
16. A manager had sales of $800 on Monday, $1,000 on Tuesday, $750 on Wednesday, $1,300 on Thursday and $2,000 on Friday. What was the manager’s average daily revenue for those five days?
17. $970
18. $1,170
19. $1,370
20. $1,570
21. Foodservice managers who use seven day rolling averages to monitor their weekly sales do so because it
22. reduces their operating expenses.
23. increases their operational profitability.
24. utilizes the operation’s most recent sales information.
25. reduces the amount of time required to report operational sales.
26. On Monday, a restaurant served 250 guests and achieved a check average of $12.55. What was the operation’s total revenue on Monday?
27. $5,020.00
28. $3,137.50
29. $31,375.00
30. $50,200.50
31. On Monday, a QSR served 500 guests and achieved revenue of $3,250. What was the operation’s check average on Monday?
32. $1.50
33. $1.54
34. $6.50
35. $6.54
36. A “weighted average sale per guest” is a calculation of the number of guests served in a number of time periods and
37. the amount of profit made in the same time periods.
38. how much the guests spent in the same time periods.
39. the total amount of expense incurred in the same time periods.
40. how many hours the operation is open during all of the same time periods.
41. What is the minimum length of time foodservice operations should keep their sales history records on file?
42. One month
43. Two months
44. One year
45. Two years
46. A manager calculates that the decimal form percentage increase in her customer count this month when compared to last month is 0.055. To convert this decimal form percentage increase to the more frequently used common form percentage, this manager should
47. divide by 10.
48. multiply by 10.
49. move the decimal point two places to the left.
50. move the decimal point two places to the right.
51. At the end of this month, an operation had achieved sales of $15,000. In the previous month the operation achieved sales of $12,000. What was the operation’s sales percentage increase for this month?
52. 10%
53. 15%
54. 20%
55. 25%
56. Last year, an operation achieved $800,000 in sales. For next year, the operation’s manager predicts a 4% increase in sales. What is the manager’s sales forecast for next year?
57. $804,000
58. $832,000
59. $864,000
60. $882,000

Questions 13, 14, and 15 utilize the following information:

Because of his education and work experience, Nimesh was recently hired as a Food & Beverage Supervisor by the Bombay Adventure Restaurant. One of his first tasks is to forecast his operation’s sales for the next six months based on the following information.

1. What is the total revenue forecast for the 6-month period?
2. $263,160
3. $265,180
4. $267,180
5. $269,320
6. What is the total estimated dollar increase in sales for the 6-month period?
7. $5,160
8. $6,450
9. $7,180
10. $10,320
11. What is the weighted average percentage increase in sales for the 6-month period?
12. 1.78%
13. 2.15%
14. 2.78%
15. 3.15%
16. An operation served 18,000 guests last month. The operation’s manager forecasts an 8% increase in guests to be served next month. If the manager’s forecast is correct, how many guests will be served next month?
17. 17,440
18. 18,440
19. 19,440
20. 20,440
21. A manager’s operation currently has an average sale per guest of $9.00. For the upcoming accounting period, the manager predicts 8,000 guests will be served at a check average 5% higher than the current average sale per guest. What will be this manager’s revenue forecast for the upcoming period?
22. $72,000
23. $75,600
24. $79,200
25. $82,800
26. What is the formula managers use to calculate their Average Sales Per Guest?
27. Total Sales x Number of Guests Served = Average Sales per Guest
28. Total Sales ÷ Number of Guests Served = Average Sales per Guest
29. Number of Guests Served x Check Average = Average Sales per Guest
30. Number of Guests Served ÷ Total Sales = Average Sales per Guest
31. A restaurant achieved $853,564 in sales this year and $769,278 in sales last year. When rounded to the nearest whole percent, what was the restaurant’s percentage variance in sales this year when compared to last year?
    1. 10% increase
    2. 10% decrease
    3. 11% increase
    4. 11% decrease
32. If an operation’s revenue forecast is $147,340 and its guest count forecast is 26,785, what is the operation’s forecasted average sale per guest?
33. $1.82
34. $5.50
35. $6.50
36. $18.18
37. What is the number managers use to record only the quantity of customers they have served?
38. Sales forecast
39. Check average
40. Guest count
41. Sales per guest
42. What would be the most likely outcome if a foodservice manager consistently underestimated future guest counts?
43. Too few staff will be scheduled to work
44. Too many staff will be scheduled to work
45. Product costs will be less than estimated
46. Total operating expenses will be lower than estimated
47. What would be the most likely outcome if a manager consistently overestimated future guest counts?
48. Too few staff will be scheduled to work
49. Too many staff will be scheduled to work
50. Guest wait times for service will likely increase
51. Total fixed expenses will be higher than originally expected
52. On Monday, a QSR operation served 200 guests at an average sale per guest of $10.50. On Tuesday, it served 175 guests at an average sale per guest of $12.00. What was the QSR’s average sale per guest for the two-day period?
53. $11.15
54. $11.20
55. $11.25
56. $11.30
57. How frequently should managers update their operations’ sales history information?
58. At least once per day
59. At least once per week
60. At least once per month
61. At least once per quarter

True/False Exam Questions

1. Knowledge of past sales levels rarely helps managers predict future sales because unknown variables affect how much business will be done during a future period of time.
   1. True
   2. False
2. Sales to Date is the number that results when managers add today’s daily sales to the sales of all prior days in the same reporting period.
   1. True
   2. False
3. The daily sales data used for calculating a rolling average is identical to the data used to calculate a fixed average.
   1. True
   2. False
4. In most cases managers should keep their operations’ sales history records for a period of at least two years.
   1. True
   2. False
5. The calculation of an operation’s sales variance percentage always results in a positive number.
   1. True
   2. False
6. An operation achieved $18,000 in sales last month. This month the operation achieved $19,080 in sales. The operation’s sales increase percent this month when compared to last month was 6%.
   1. True
   2. False
7. Calculating sales variance is extremely helpful when comparing the changing financial performance of operations with very different volume levels.
   1. True
   2. False
8. An operation achieved $8,000 in sales last month. The manager forecasts a 4% increase in sales for next month. The manager’s sales forecast for next month is $8,032.
   1. True
   2. False
9. An operation achieved an average sale per guest of $9.60 last month. The manager forecasts a 5% increase in average sale per guest for next month. The manager’s average sale per guest forecast for next month is $10.08.
   1. True
   2. False
10. Changes in selling price, new competitors, facility renovations, and improved selling programs are examples of factors that managers may need to consider when estimating future sales levels in their own operations.
    1. True
    2. False