CEM - FINANCE, BUDGETING &
CONTRACTS QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
Zero-Based Budget - ANSWER Not based upon historical data. Identifies and assesses all sources of
expense & income. Most common for new launches.
Incremental Budget - ANSWER Prepared using a previous year's budget or actual performance as a basis,
with incremental changes estimated for the new budget period
Hybrid Budget - ANSWER Both aspects of zero-based and incremental budgets. Best for a change in
venue or timing of an event - ideal for international events.
Line Item Budgets - ANSWER Frequently used. All 3 types of budgets. Easy to prepare, provides a way to
compare performance from one period to another.
Chart of Accounts - ANSWER Document that lists all sources of revenue and expense using distinctive
codes for each line.
Performance/Function Budget - ANSWER Focuses primarily on the functions and outcomes for each item
and is useful in developing the cost of an activity. (Quantity not quality is a disadvantage)
Giveaways - ANSWER Promo Product - can be easily prioritized and funded at cost-effective levels
Profit Based - ANSWER Revenue exceeds expenses
Break-Even - ANSWER Revenue and expenses are equal
Deficit-Based - ANSWER Expenses exceed revenue
, Fixed Expenses - ANSWER Typically charges for AV, facility rental, website development, marketing costs,
registration services & equipment, event signage. Once negotiated, charges do not change based on
attendance or consumption (agreed upon in advance)
Variable Expenses - ANSWER Subject to consumption (ex. is F&B)
Indirect Expenses - ANSWER Ex. Office rent, staff salaries, staff benefits, office maintenance and similar
overhead costs
Budget Contingencies - ANSWER Unanticipated expenses
4 Major sources of Revenue - ANSWER Attendance Registration, Exhibit/Booth stand sales, Sponsorship,
Advertising
Break Even Calculation - ANSWER (# of attendees known, fee not known)
1. Determine fixed costs
2. Determine variable costs (var. costs pp) x (# of att)
3. Add fixed to variable costs
4. Break even = Total costs/#of attendees
(If fee is known)
1. Contribution Margin = (reg. fee) - (Variable costs)
2. Fixed costs/contrib. margin = # of att. needed to break even
Weighted Avg. Revenue - ANSWER Good way to estimate max. exhibit space rental income per net sq. ft.
of income producing exhibit space.
Rev. per NSF = total expected revenue/amt. of revenue produced per sq ft
Rev per Booth = total revenue/#of revenue producing booths
Informed Decision Making - ANSWER Determining what the exhibitor will pay for exhibit space also
includes a # of additional important considerations
CONTRACTS QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
Zero-Based Budget - ANSWER Not based upon historical data. Identifies and assesses all sources of
expense & income. Most common for new launches.
Incremental Budget - ANSWER Prepared using a previous year's budget or actual performance as a basis,
with incremental changes estimated for the new budget period
Hybrid Budget - ANSWER Both aspects of zero-based and incremental budgets. Best for a change in
venue or timing of an event - ideal for international events.
Line Item Budgets - ANSWER Frequently used. All 3 types of budgets. Easy to prepare, provides a way to
compare performance from one period to another.
Chart of Accounts - ANSWER Document that lists all sources of revenue and expense using distinctive
codes for each line.
Performance/Function Budget - ANSWER Focuses primarily on the functions and outcomes for each item
and is useful in developing the cost of an activity. (Quantity not quality is a disadvantage)
Giveaways - ANSWER Promo Product - can be easily prioritized and funded at cost-effective levels
Profit Based - ANSWER Revenue exceeds expenses
Break-Even - ANSWER Revenue and expenses are equal
Deficit-Based - ANSWER Expenses exceed revenue
, Fixed Expenses - ANSWER Typically charges for AV, facility rental, website development, marketing costs,
registration services & equipment, event signage. Once negotiated, charges do not change based on
attendance or consumption (agreed upon in advance)
Variable Expenses - ANSWER Subject to consumption (ex. is F&B)
Indirect Expenses - ANSWER Ex. Office rent, staff salaries, staff benefits, office maintenance and similar
overhead costs
Budget Contingencies - ANSWER Unanticipated expenses
4 Major sources of Revenue - ANSWER Attendance Registration, Exhibit/Booth stand sales, Sponsorship,
Advertising
Break Even Calculation - ANSWER (# of attendees known, fee not known)
1. Determine fixed costs
2. Determine variable costs (var. costs pp) x (# of att)
3. Add fixed to variable costs
4. Break even = Total costs/#of attendees
(If fee is known)
1. Contribution Margin = (reg. fee) - (Variable costs)
2. Fixed costs/contrib. margin = # of att. needed to break even
Weighted Avg. Revenue - ANSWER Good way to estimate max. exhibit space rental income per net sq. ft.
of income producing exhibit space.
Rev. per NSF = total expected revenue/amt. of revenue produced per sq ft
Rev per Booth = total revenue/#of revenue producing booths
Informed Decision Making - ANSWER Determining what the exhibitor will pay for exhibit space also
includes a # of additional important considerations
