When Guests Include a Server Tip While Paying Their Bills

question 20

Multiple Choice

When guests include a server tip while paying their bills with a credit or debit (payment) card

• A) the tip must be placed in a tip pool.
• B) the guest's server must receive 100% of the tip.
• C) the guest's server must receive no less than 98% of the tip.
• D) owners of the operation may reduce the tip by an amount equal to charges levied by the card company.

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Definitions:

Variable Cost

Costs that vary in direct proportion to changes in the level of production or activity within a business.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes, among other expenses.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Product

Anything that can be offered to a market to satisfy the desire or need of a customer.