Certified Meeting Professional (CMP) Practice Exam

Which of the following is NOT a fixed cost?

1. Meeting room rental

2. Marketing expenses

3. Food and beverage costs

4. Insurance

The correct answer is: Food and beverage costs

Food and beverage costs are typically considered variable costs rather than fixed costs. This is because they can fluctuate based on the number of attendees and the specific menu choices made for an event. If the number of participants increases or if different catering options are selected, the food and beverage expenses will vary accordingly. In contrast, fixed costs remain constant regardless of the number of participants or changes in program specifics. Meeting room rental, marketing expenses, and insurance are examples of fixed costs because they do not change based on the number of attendees or the scale of the event. Meeting room rental is agreed upon before the event, marketing expenses are budgeted typically before an event occurs, and insurance is purchased to cover a specific event or time frame, making them fixed for that period. Understanding the distinction between fixed and variable costs is crucial for successful budget management in event planning. It enables planners to anticipate expenses accurately and adjust their budget for food and beverage based on the expected number of attendees.