Quiz: Budget Architecture

Target: 70% or higher. Several questions require arithmetic. Do it before opening the answer.

Section 1: Multiple Choice (1 point each)

1. The practical test of whether a budget encodes a client's priorities is:

  • A) Whether it sums to the total
  • B) Whether every category falls inside its benchmark band
  • C) Whether a stranger reading it can tell what this couple cares about
  • D) Whether the contingency is 10%
Answer **C).** *Why C:* A budget is a set of claims about what matters most. If a stranger cannot tell, you have built an average with a client's name on it. *Why not B:* Benchmark conformity is evidence of *averageness*, which is nearly the opposite of the test. *Reference:* §6.1

2. Benchmarks are primarily useful for:

  • A) Allocating a total across categories
  • B) Noticing when something is strange or missing
  • C) Negotiating with vendors
  • D) Justifying the planner's fee
Answer **B).** *Why B:* Three checks in order: does anything sum wrong (in dollars, not percentages); is anything missing entirely; is anything outside its band. Most planners do only the third, which is the least useful. *Why not A:* Applying midpoints to a total produces the average wedding, and nobody is having the average wedding. *Reference:* §6.2

3. At a raw site, the benchmark error most planners make is:

  • A) Under-budgeting catering
  • B) Applying a 10% rentals benchmark to a wedding where infrastructure is a separate cost
  • C) Over-budgeting the venue
  • D) Forgetting the contingency
Answer **B).** *Why B:* The venue line collapses and rentals explode. The fix: allocate venue and rentals as one combined line at **18–30%**, then split it. *Reference:* §6.2

4. A service charge is:

  • A) Always a gratuity distributed to staff
  • B) Usually the caterer's own revenue, covering staffing and overhead
  • C) Required by law in most states
  • D) Applied only to alcohol
Answer **B).** *Why B:* Some of it may reach staff; often none does. **Assume it does not, and ask in writing.** A couple who assumes the tip is handled and later adds 18% has grown catering by 40% before tax. *Reference:* §6.4

5. A quote of $95/head with a 20% service charge (not distributed), no admin fee, 8% tax on the service-charge-inclusive base, and an 18% gratuity produces a loaded rate of approximately:

  • A) $114
  • B) $123
  • C) $140
  • D) $158
Answer **C) ≈ $140.** $95 × [(1.20)(1.08) + 0.18] = $95 × [1.296 + 0.18] = $95 × 1.476 = **$140.22.** *Why not A or B:* Those omit the gratuity, the tax on the service charge, or both. *Reference:* §6.4

6. The multiplier range when a service charge is not distributed and a gratuity is added is roughly:

  • A) 1.10–1.20×
  • B) 1.25–1.32×
  • C) 1.45–1.60×
  • D) 1.75–2.00×
Answer **C) 1.45–1.60×.** *Why C:* Where the service charge *is* distributed, it drops to 1.25–1.32×. The difference between those two bands, on a $12,000 food subtotal, is roughly $2,200. *Reference:* §6.4

7. Sales tax should be:

  • A) Negotiated down for large bookings
  • B) Never negotiated — it is statute, and asking marks you as inexperienced
  • C) Excluded from the budget as the client's responsibility
  • D) Applied only to the food subtotal by convention
Answer **B).** *Why B:* The venue has no discretion, and asking weakens you on the parts that *are* negotiable — the admin fee, the cake-cutting fee, and above all the base. *Why not D:* The tax base varies by jurisdiction and must be established in writing, never assumed. *Reference:* §6.4, §6.4.1

8. The general negotiating principle from §6.4.1 is:

  • A) Always ask for 10% off
  • B) When a cost has percentages stacked on it, attack the base, not the percentages
  • C) Negotiate everything at once, at signing
  • D) Never negotiate with a vendor you want a relationship with
Answer **B).** *Why B:* Reducing a $18,400 food subtotal by $2,200 saves roughly $2,800 all-in. Successfully negotiating the service charge down two full points saves roughly $470. The base is where the leverage is. *Reference:* §6.4.1

9. Contingency should be:

  • A) Whatever is left after allocating everything else
  • B) 10%, taken off the top before any allocation, as its own visible line
  • C) Held by the client, not budgeted
  • D) 3–5%, since most weddings run close to plan
Answer **B).** *Why B:* A contingency taken from the leftovers is not a contingency. And 10% is not a cushion — it is the *expected* cost of a normal event's normal surprises, of which $1,500–$4,500 will be spent. *Reference:* §6.5

10. Which is the most commonly omitted line in a first-draft wedding budget?

  • A) The cake
  • B) Vendor meals
  • C) The marriage license
  • D) Gratuities
Answer **B) Vendor meals.** *Why B:* Eleven vendors at $35 is $385. It is in almost every photographer's, videographer's, and DJ's contract and in almost no first-draft budget. *Reference:* §6.5

11. An estimate should never be overwritten when a contract comes in higher because:

  • A) It would breach the contract
  • B) The estimate is the decision you made, and overwriting it deletes the record and disables the alarm
  • C) Clients check the original figures
  • D) Accounting standards require it
Answer **B).** *Why B:* Accuracy is the "contracted" column's job. The estimate's job is to be what reality is compared against. A planner who revises estimates upward has a budget that always appears on track and is $6,000 over in month nine with no record of how. *Reference:* §6.6

12. In the drift table, the entries that actually sink a budget are:

  • A) The single largest one
  • B) The ones with an obvious cause
  • C) The seven or eight individually too small to be worth a phone call
  • D) The ones caused by the client
Answer **C).** *Why C:* The entries a planner would raise are already being managed. The dangerous ones are $260, $354, $380, $620, $200, $420, $310 — collectively $2,544, individually never worth a call. *Reference:* §6.6

Section 2: True/False with Justification (1 point each)

13. A caterer quoting $78/head is cheaper than one quoting $85/head.

Answer **Not determinable, and usually false in practice.** $78 with a 24% service charge (not distributed), a 3% admin fee, tax on the service-charge-inclusive base, and an 18% gratuity loads to roughly $119. $85 with a 20% distributed service charge and tax on food only loads to roughly $110. **The higher menu price is the cheaper caterer**, and the difference at 118 guests is over $1,000. The menu price is the number the caterer puts on page one. The loaded rate is the number that leaves the client's account.

14. A budget that conforms to every benchmark band is a well-built budget.

Answer **False, and the §6.2 worked example demonstrates it.** Every category can sit inside its band while the contingency is 2.9% instead of 8%, the total is $1,000 over, and transport, officiant, gratuities, and the planner's fee are missing entirely — roughly $9,000 of omission. Benchmark conformity checks only the third and weakest of the three tests.

15. If the client wants to spend the contingency in month five, the planner should refuse.

Answer **False — the planner should make the trade visible and then do what the client decides.** It is the client's money. What the planner owes them is an accurate account of the trade: not "nicer chairs versus nothing," but "nicer chairs now versus your first choice of something in month eleven," with the $4,000 typical-surprise list attached. Then it is theirs.

16. Because a raw site has a low venue fee, a raw-site budget will show catering at a higher percentage of the total than a hotel wedding would.

Answer **False — the opposite, usually.** At a raw site, roughly $9,000 of infrastructure (tent, restrooms, generator, shuttles, dance floor) comes out of the same total, shrinking the pool available for everything else. Catering therefore appears at a *lower* percentage even though the food is identical. This is why the Reyes–Whitfield catering line reads 28% against a 30–40% benchmark and is nonetheless correct — it is 34% of the *allocatable* pool.

17. A wedding that comes in $2,900 under budget represents a planning failure — the client should have spent it on their wedding.

Answer **Mostly false, with a real caveat.** Unspent contingency returned visibly is a *result*, and it is the strongest available argument for holding one in the first place. The caveat, which exercise D.3 pursues: a planner who returns 7% on every wedding is systematically over-reserving, and that is not prudence — it is holding someone else's money for no reason. One under-run is a good outcome; a pattern of them is a mis-calibrated reserve.

Section 3: Short Answer (2 points each)

18. A client says: "The caterer is $88 a head, so 130 people is $11,440." Correct them.

Sample Answer "That's the menu price, and it's about two-thirds of what you'll actually pay. Their contract has a 22% service charge — which isn't a tip, it's their revenue — plus a 3% admin fee, and then sales tax applies to all of that, not just to the food. And because the service charge doesn't go to staff, you'll want to add a gratuity on top. Run all the way through, $88 becomes about $135. So 130 people is roughly $17,500, not $11,400. I've budgeted $135. The good news is that you now know that in month two rather than finding out from an invoice." *Rubric — full credit requires:* naming service charge, admin fee, tax base, and gratuity; stating that the service charge is not a tip; producing a loaded rate in the right neighborhood; and ending with the reassurance that this is *why* the budget was built this way.

19. Explain why attacking the base beats negotiating the rate, with numbers.

Sample Answer On an $18,400 food subtotal with a 21% service charge and 7.5% tax on the service-charge-inclusive base: **Negotiating the service charge to 19%** saves $368 of service charge and $28 of tax — **$396.** **Reducing the food subtotal by $2,200** through menu construction saves $2,200 of food, $462 of service charge, and $200 of tax — **$2,862.** Seven times as much, and it does not require the vendor to give anything up. The percentages are computed *on* the base, so every dollar removed from the base removes its multipliers with it. The generalization: **when a cost has percentages stacked on it, attack the base.** *Rubric:* Must compute both and show that the base cut also removes the service charge and tax on the removed amount. Full credit states the general principle.

20. A budget's variance column reads +$844 in month six. What do you do?

Sample Answer Raise it, in a two-minute conversation, now. > "We're eight hundred over across three lines — the venue came in a bit higher than estimate, the loaded catering rate is three dollars more than I'd modeled, and the florist quoted above my number. Nothing alarming, and I want to name it at eight hundred rather than at three thousand. Two options: absorb it from contingency, or take four hundred out of stationery, which you ranked last. Which would you rather?" The point is timing, not size. Eight hundred is not a problem; it is a *signal*. Two conversations at month six and month nine keep the total drift under $1,500. Saying nothing produces a month-eleven discovery of $3,662, spent invisibly, before the real surprises have started. *Rubric:* Must raise it immediately; must present it as a signal rather than a problem; must offer a concrete choice referencing the ranking; must not simply absorb it into contingency without asking.

Section 4: Applied Scenario (5 points)

21. A couple has $58,000** and has invited **180 guests** to a barn venue. Your honest allocation, at 151 expected attendance, comes to **$66,300.

Their ranking: 1. Food · 2. Guest comfort · 3. Photography. Most relaxed about: stationery.

Step map: restroom bracket at 150 (+$1,100), second bar station at 150 (+$620), tent frame upgrade at 165 (+$2,400), table every 10 at $160, server every 22 at $290.

Loaded catering rate: $148. Other fully variable: $41/guest.

Produce: (a) the size and nature of the problem; (b) the three paths, costed; (c) which you present first and why; (d) the opening sixty seconds of the conversation.

Sample Answer **(a) The problem.** $8,300 over — 14% of the budget. And the expected attendance of 151 is one guest over a step cluster: the restroom bracket and second bar station both trip at 150, costing $1,720 for a single person. **The forecast is sitting exactly on a cliff**, which means a ±2% forecast error swings the budget by $1,720 in either direction. That is the more urgent finding than the $8,300. **(b) Three paths.** **Path one — fewer people.** Bring invitations from 180 to about 155, yielding ~130 expected at 84%. Saves 21 × $189 = $3,969 variable, plus two tables ($320), one server ($290), and — critically — drops under both 150-steps ($1,720) with real margin. **Total: $6,299.** Still $2,000 short, closable from stationery, floral, and the second photographer. **Result: the wedding as designed, 25 fewer names.** **Path two — hold 180, plainer wedding.** Must find $8,300 without touching count, *and* must size infrastructure for 151+ which means committing the $1,720 and possibly the tent at 165. Realistically: cut photography from three-shooter to one ($1,800), drop the band idea ($2,200), floral to minimum ($2,400), stationery to digital ($900), bar from full to beer/wine/two cocktails ($1,400). **Total: $8,700.** Works — and cuts photography, which they ranked third, and the bar, which sits under guest comfort at rank two. **This path fights their own ranking.** **Path three — more money.** $8,300, or $6,000 plus modest trims. **(c) Present path one first**, and say why: it is the only path that does not require cutting something they ranked in the top three, and it is the only one that gets them off the 150 cliff. That is a defensible reason rather than a preference, and it should be stated as a reason. But present all three, and cost all three. The choice is theirs. **(d) The opening sixty seconds:** > "This is one of the conversations I flagged in our first meeting — early, before I've solved it. Two things, and the second one matters more than the first. > > The first is that we're about eight thousand three hundred over. That's real and it's fixable and I'll show you three ways. > > The second is the one I actually want to talk about. You've invited a hundred and eighty. I'd expect about a hundred and fifty-one to come — and a hundred and fifty is the exact number where the restroom trailer goes up a size and we need a second bar. One guest, seventeen hundred dollars. So right now your budget depends on a forecast being right to within one person, and that's not a position I want you in either way. > > Let me show you what each option costs." *Rubric:* | Criterion | 0 | 1 | 2 | |---|---|---|---| | Problem (a) | States $8,300 only | States $8,300 | Identifies the 150-cliff as the *more urgent* finding and quantifies the forecast sensitivity | | Paths (b) | Fewer than three, or uncosted | Three, roughly costed | Three, costed, with path two explicitly flagged as fighting their own ranking | | Recommendation (c) | No recommendation or an unexplained one | Names a path | Names a path *and* gives a reason grounded in the ranking and the cliff, while stating the choice is theirs | | Opening (d) | Leads with the deficit | Leads with the deficit and invokes the promise | Invokes the promise, leads with the *cliff* over the deficit, and ends with a concrete next step | *Scoring: (a)=1.5, (b)=1.5, (c)=1, (d)=1.*

Scoring and Next Steps

Score Assessment What to do
Under 50% Needs review Re-read §6.3, §6.4, §6.5. Redo Part A and B.1.
50–70% Partial Do B.1 and B.4 by hand until the loaded rate is automatic.
70–85% Solid Proceed to Chapter 7. Build the loaded-rate calculator (C.1) first.
Over 85% Strong Proceed. Deep Dive: case-study-02.md and exercises E.1, E.3.

Regardless of score: do C.1 and C.2. Every remaining chapter of Part II assumes you can compute a loaded rate without thinking about it.