Exercises: Budget Architecture

Difficulty guide: ⭐ Foundational (5–10 min) · ⭐⭐ Intermediate (10–20 min) · ⭐⭐⭐ Challenging (20–40 min) · ⭐⭐⭐⭐ Advanced (40+ min)

Do the arithmetic by hand. A planner who cannot compute a loaded rate in their head to within a few dollars will be ambushed at some point, and it will be in front of a client.

Part A: Conceptual Understanding ⭐

A.1. Explain, in your own words, what it means that a budget is a priority statement rather than a forecast. Give the practical test.

A.2. What are benchmarks actually good for? Name the three checks, in order, and explain why the third is the least useful.

A.3. Distinguish a service charge, an administrative fee, and a gratuity. Which usually reaches staff?

A.4. Why does the tax base matter? Give the two possibilities and the size of the difference on a $12,000 food subtotal at 8% tax and a 22% service charge.

A.5. Explain why the contingency comes off the top rather than from what is left over.

A.6. Why must an estimate never be overwritten when a contract comes in higher?

A.7. Define without looking back: loaded rate, variance, taxable service charge, soft costs, the budget floor.

A.8. State the general negotiating principle from §6.4.1 in one sentence, and give a non-catering example of it.

Part B: Applied Analysis ⭐⭐

B.1. Loaded rates, six quotes. Compute the all-in per-guest cost for each. Sales tax is 8.5% unless stated.

Rank a–e by true cost. Which had the lowest menu price and which the lowest loaded rate?

B.2. Build an allocation. $68,000 budget, 165 expected guests, hotel ballroom with in-house catering. Ranking: 1. Music · 2. Photography · 3. Bar. Most relaxed about: floral. Build the full six-step allocation. Show non-negotiables, contingency, steps, and the ranked remainder. Then check it against the benchmark and report every deviation with a reason.

B.3. Find the missing lines. Here is a first-draft budget for a 130-guest wedding at $55,000:

| Catering $19,000 · Venue $7,500 · Photo $6,000 · Bar $5,200 · Floral $4,800 · Music $4,000 · Rentals $3,200 · Attire $2,800 · Cake $800 · Stationery $1,200 | Total $54,500 |

Apply the three benchmark checks. What is missing, what is out of band, and what is the real shortfall?

B.4. The base versus the rate. A caterer's food subtotal is $18,400 with a 21% service charge and 7.5% tax on the service-charge-inclusive base. Compute the saving from: (a) negotiating the service charge to 19%; (b) reducing the food subtotal by $2,200 through menu construction; (c) both. Present all three as you would to a client.

B.5. Drift. Take the nine-event drift table in §6.6 and add three more plausible entries for months 12, 13, and 14. Then state, for each of the twelve, whether a typical planner would have raised it with the client at the time — and total the ones they would not have.

B.6. Contingency sizing. A couple has $30,000 and 90 guests at an all-inclusive venue. Argue for 8%, then for 10%, then for 12%. Which do you take, and what would change your answer?

B.7. The gap, computed. A couple has $48,000, has invited 175, and the honest allocation at 147 expected comes to $54,600. Compute: (a) how many fewer guests would close it; (b) what path two (hold the count, plainer wedding) would have to cut; (c) which of the two you would present first and why.

Part C: Real-World Application ⭐⭐–⭐⭐⭐

C.1. Build the loaded-rate calculator. ⭐⭐ A spreadsheet cell or small tool that takes menu price, service charge, admin fee, tax rate, tax base, and gratuity and returns the loaded rate and the multiplier. Test it against every example in this chapter.

C.2. Three real contracts. ⭐⭐⭐ Obtain three real catering or venue contracts from your market. For each, extract: service charge rate, whether it is distributed (and how you know), admin fee, tax base, overtime rate, guarantee terms, and every additional fee. Build a comparison table. Then compute the loaded rate for each at 130 guests.

C.3. The four-column template. ⭐⭐ Build the working budget document: category, estimate, contracted, paid, variance, due dates, deposit and balance amounts, notes. Make it something a client could read.

C.4. Local benchmarks. ⭐⭐⭐ Using the venue and caterer pricing you collected in Chapter 1 exercise C.2, build a benchmark allocation for your market at three budget levels — $25,000, $50,000, $100,000, at 130 guests. Where does your local table differ from §6.2's?

C.5. Ask the three questions. ⭐⭐ Email or call three venues and ask: is your service charge distributed to staff? Is sales tax applied to the service charge? What is your overtime rate? Record the answers and how comfortable each was answering.

C.6. Rehearse the gap conversation. ⭐⭐ Write it and say it aloud, with the silence after the number timed at three full seconds. Then have someone play the client and ask "what would you do?" Answer it four different ways and decide which is yours.

Part D: Synthesis and Critical Thinking ⭐⭐⭐

D.1. Cross-chapter integration. Chapter 4's ranking, Chapter 5's step map, and this chapter's allocation are three artifacts that must agree. Construct a single combined worksheet that produces the allocation directly from the ranking and the step map, and identify what it would take for the three to contradict each other.

D.2. Critique the threshold concept. "A budget is a priority statement" is presented as liberating. Construct the case that it is a rationalization — that most budget allocation is driven by market prices and structural constraints, that the client's ranking moves perhaps 15% of the total, and that presenting the budget as an expression of their values overstates their agency. Then respond. How much of a budget is actually discretionary?

D.3. The contingency ethics. A planner holds a 10% contingency and the wedding comes in $2,900 under. Argue that returning it visibly is obviously correct. Then argue that a planner who routinely returns 7% has been systematically over-reserving and should have let the client spend it on their wedding. Where is the line between prudence and hoarding someone else's money?

D.4. Transfer. Apply the loaded-rate concept to a domain outside events where a headline price is systematically not the paid price: airline fares, car purchase, construction, medical billing, or software licensing. What does each industry's version of the multiplier look like? What does events do better or worse?

D.5. The honest recommendation. §6.7's script says to present three paths as equals and have no preference. The Project Checkpoint asks what you say when the client asks anyway. Take a position: should a planner give a recommendation on a question that is fundamentally about the client's values? Argue it, then write the two sentences you would actually say.

Part M: Mixed Practice (Interleaved) ⭐⭐–⭐⭐⭐

M.1. (Ch.5 + Ch.6) A client adds 12 guests, taking them from 138 to 150. Using a step map with a restroom bracket at 150 and a table every 8, compute the budget impact at a loaded rate of $142. Then write the two-sentence version you send them.

M.2. (Ch.4) The couple ranked floral second. Your allocation gives floral 6% of the total. Is this a contradiction? What do you check first?

M.3. (Ch.3) The client's mother, who is a payer and not a decider, asks to see the budget. What do you send, and what do you send it with?

M.4. (Looks like one thing, is another) A caterer's proposal is $12 per head cheaper than the next-best. What are the four most likely explanations, and which one do you check first?

M.5. (Ch.1 + Ch.5 + Ch.6) Compute the all-in cost of one additional guest at a raw site: loaded catering rate $142, bar $26, place setting $9, chair $6, stationery and favors $8. Now add the case where this guest is the one who crosses a restroom bracket at $700 and a table at $147. State both numbers and write the sentence you would say to a client asking to add "just one more."

Part E: Research and Extension ⭐⭐⭐⭐

E.1. Investigate service charge distribution law in your jurisdiction. Is disclosure required? Is a service charge presumed to be a gratuity? Has there been litigation? Write a 600-word brief with sources, and note explicitly where you could not establish an answer.

E.2. Compare wedding budget benchmarks published by three different sources. Where do they agree, where do they diverge, and what does each one omit? Pay particular attention to whether the planner's fee appears at all, and what that implies about who publishes them.

E.3. Build the loaded rate for a market outside the US. How do the multipliers differ where service charges are uncommon, where VAT applies, or where tipping norms differ? Interview one planner working in that market. Write 700 words. (Chapter 33 will use this.)

Solutions

Selected solutions: appendices/answers-to-selected.md. Rubrics for open-ended items: instructor-guide/additional-assessments/all-assessments.md.