Certified Dietary Manager (CDM) Practice Exam

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What does Full Time Equivalent (FTE) measure?

The total salary of all employees
The number of hours worked in an overall labor budget
A person's performance relative to their duties
The total amount of cleaning required

The correct answer is: The number of hours worked in an overall labor budget

Full Time Equivalent (FTE) is a standard measurement used to quantify the total number of hours worked by all employees in terms of full-time work. It allows organizations to represent part-time workers' hours as a fraction of a full-time workload, thus providing a more accurate picture of overall labor resources. For instance, if a full-time position is defined as 40 hours per week, two part-time employees working 20 hours each would collectively count as one FTE. This measure is crucial for labor budgeting and workforce planning because it helps managers understand their staffing levels relative to operational needs without getting lost in the complexity of staffing arrangements. Other options do not accurately reflect the definition of FTE. Total salary would relate to expenses rather than labor hours, performance evaluation refers to individual contributions that aren't directly tied to total hours, and cleaning requirements do not pertain to the measurement of labor hours in the context of FTE.