Chapter 7

Managing the Cost of Labor

Multiple Choice Exam Questions

1. What is the category of workers that are generally exempt from the overtime pay provisions of the Fair Labor Standards Act (FLSA)?
2. Tipped employees
3. Salaried employees
4. Unionized employees
5. Hourly paid employees
6. What employee-related expense category will be the largest in a typical food service operation?
7. Labor
8. Wages
9. Salaries
10. Payroll
11. What do managers measure when they calculate a productivity ratio?
12. Profit margin
13. Labor usage
14. Inventory turnover
15. Hourly sales levels
16. What is a location that would be considered a front of house (FOH) area in a food service operation?
17. Bakeshop
18. Dining room
19. Beverage storage room
20. Salad preparation area
21. What information should be included in a job description for a cook?
22. A description of the skills required to hold the job
23. A listing of all tasks required to complete the job
24. The name of the person to whom the cook would report
25. Identification of the times at which the cook would be scheduled to work
26. What step should managers complete first when they develop a task training program?
27. Planning the training session
28. Presenting the training session
29. Determining how the task is to be done
30. Evaluating the effectiveness of the task training
31. What step should managers complete last when they develop a task training program?
32. Presenting the training session
33. Retraining at the proper interval
34. Determining how the task is to be done
35. Evaluating the effectiveness of the training
36. What is a requirement for an organization implementing a cloud-based employee scheduling system?
37. All of its employees are full-time employees
38. It provides all of its employees access to internet
39. It employs a large number of workers
40. It employs a small number of part-time employees
41. What is the formula managers use to calculate an employee turnover rate?
42. Employees Separated (+) Employees in Workforce = Employee Turnover Rate
43. Employees Separated (-) Employees in Workforce = Employee Turnover Rate
44. Employees Separated (x) Employees in Workforce = Employee Turnover Rate
45. Employees Separated (÷) Employees in Workforce = Employee Turnover Rate
46. A manager employed 100 workers at the beginning of an accounting period, and 120 workers at the end of the same period. During the period 50 employees voluntarily left their employment and 5 employees were terminated. What was this manager's overall employee turnover rate in the accounting period?
47. 40%
48. 50%
49. 400%
50. 500%
51. What will be the normal impact on costs when managers buy convenience items rather than make those same items from scratch?
52. Food costs increase and labor costs increase
53. Food costs decrease and labor costs increase
54. Food costs increase and labor costs decrease
55. Food costs decrease and labor costs decrease
56. What measure of labor productivity compares the price paid for labor with the revenue generated in a food service operation?
57. Sales per labor hour
58. Labor cost percentage
59. Labor dollars per guest served
60. Guests served per labor hour
61. What measure of labor productivity would increase if a manager gave all kitchen employees a 2% cost of living pay increase?
62. RevPASH
63. Sales per labor hour
64. Labor cost percentage
65. Guests served per labor hour
66. Which measure of labor productivity is unaffected by changes in menu prices and the price paid for labor?
67. Sales per labor hour
68. Labor cost percentage
69. Labor dollars per guest served
70. Guests served per labor hour
71. On Monday, a manager’s operation generated revenue of $1,200. The manager served 100 guests, used 25 total hours of labor, and had a labor cost of $300. What was the manager’s labor cost percentage on Monday?
72. 20%
73. 25%
74. 30%
75. 35%
76. On Monday, a manager’s operation generated revenue of $1,200. The manager served 100 guests, used 25 total hours of labor, and had a labor cost of $300. What were the manager’s sales per labor hour on Monday?
77. $48.00
78. $50.00
79. $52.00
80. $54.00
81. On Monday, a manager’s operation generated revenue of $1,200. The manager served 100 guests, used 25 total hours of labor, and had a labor cost of $300. What was the manager’s number of guests served per labor hour on Monday?
82. 2
83. 4
84. 20
85. 40
86. What is the measure of labor efficiency that requires managers to consider the number of seats made available to their customers?
87. RevPASH
88. Labor cost percentage
89. Guests served per labor hour
90. Guests served per labor dollar
91. A manager estimates that 2,000 guests will be served next week. The manager’s operation serves 2.5 guests per labor dollar expended. What will be the manager’s estimated cost of labor next week?
92. $500
93. $800
94. $5,000
95. $8,000
96. What is the first step in the 4-step process of managing payroll costs?
97. Analyzing results
98. Scheduling employees
99. Forecasting sales volume
100. Determining productivity standards
101. What is the final step in the 4-step process used to manage payroll costs?
102. Analyzing results
103. Scheduling employees
104. Forecasting sales volume
105. Determining productivity standards
106. A manager forecasts that 150 guests will be served tomorrow. The manager knows that one server can provide high-quality service for 30 guests and one cook can prepare high-quality food for 60 guests. How many servers and cooks should be scheduled for tomorrow?
107. 3 servers and 2 cooks
108. 3 servers and 3 cooks
109. 5 servers and 2 cooks
110. 5 servers and 3 cooks
111. What will be the effect on fixed and variable labor cost percentages if an operation increases its sales volume?
112. Fixed labor cost percentage and variable labor cost percentage will decline
113. Fixed labor cost percentage will increase and variable percentage will decline
114. Fixed labor cost percentage will decline and variable percentage will stay the same
115. Fixed labor cost percentage will increase and variable percentage will stay the same
116. A food service operation experienced a 10% decline in volume this month when compared to the previous month. If the reduction in volume was anticipated and scheduled for properly, the operation’s
117. fixed and variable labor cost percentages will decrease.
118. fixed and variable labor cost percentages will increase.
119. fixed labor cost percentage will increase and its variable cost percentage will stay the same.
120. fixed labor cost percentage will decrease and its variable cost percentage will stay the same.
121. When managers take steps to empower their employees, these employees will have increased
122. pay.
123. benefit packages.
124. authority to make decisions.
125. ability to set their own work schedules.

True/False Exam Questions

1. An operation’s payroll includes its wages, salaries and benefit costs.
   1. True
   2. False
2. The formula managers use to measure productivity is: Output (÷) Input = Productivity.
   1. True
   2. False
3. A job specification is a listing of the tasks that must be accomplished by employees hired to fill a particular position.
   1. True
   2. False
4. Negligent hiring is the failure on the part of an employer to exercise reasonable care in the selection of employees.
   1. True
   2. False
5. Interviewing and training time are examples of the hidden costs of employee turnover.
   1. True
   2. False
6. Involuntary separation occurs when an employee, rather than the employee’s manager, makes the decision for the employee to leave an organization.
   1. True
   2. False
7. If an operation achieved $8,000 in sales for one day and a labor cost of $1,760 for that same day, then the operation achieved a 22% labor cost.
   1. True
   2. False
8. An increase in its menu prices will have no effect on an operation’s RevPASH.
   1. True
   2. False
9. The first step in the management of payroll cost is the determination of productivity standards.
   1. True
   2. False
10. Managers can reduce their operations’ variable labor cost percentages by increasing worker productivity.
    1. True
    2. False