In which of the following costing methods, overhead costs are applied in proportion to production volume?

• A.Absorption costing
• B.Mark-up costing
• C.Activity-based costing
• D.Marginal costing

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Which of thefollowing are most likely to be sources of conflict that can emerge from the content of commercial negotiations? Select TWO that apply.

• A.Framework arrangement
• B.Payment terms
• C.Contract governing law
• D.Requisition
• E.Cultural differences

Correct Answer: B,C

Explanation
There are multiple sources of divergent positions that can arise in situations where money is exchange for goods and services. There are 2 different types of sources. Those that arise from the content or subject matter of the negotiation (what is being negotiated) and those that arise from the process of negotiation (how it is being negotiated).
Sources of divergent position - the content of negotiation:
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Cultural differences are the source of conflict in the process of negotiation.
Requisition is an internal document raised by user or store to communicate to procurement the need to buy the product or service specified. This is merely a internal document.
Framework arrangement is a rather loose set-up, without any legal standing. It usually occurs when an organisation has decided for itself to limit the number of suppliers it is willing to work with and, through a purely internal process, sets up an approved list of such suppliers.
LO 1, AC 1.1

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Which of the following is the most appropriate approach to investors or shareholders who have high level of influence but low interest in the running of business?

• A.Engage and keep them satisfied
• B.Engage and consult with them regularly
• C.Keep these people inform through general communication media
• D.Manage them closely

Correct Answer: A

Explanation
Investors or shareholders who have high level of influence but low interest belong to 'Keep satisfied' quadrant of Mendelow's Stakeholder Matrix.
You may read 2 versions from L4M1 and L4M5 here:

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LO 1, AC 1.1

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Which of thefollowing is the purpose of using stakeholder support level scale?

• A.To identify stakeholder level of influence and interest and plot them on stakeholder map
• B.To identify stakeholder's needs and expectations
• C.To estimate the gap and the progress towards desired levels of support
• D.To identify key stakeholders

Correct Answer: C

Explanation
In order to estimate the gap and the progress towards desired level of support, a stakeholder support scale can be used by the procurement internally. The support level scale measures stakeholder commitment. Current support level for the procurement/negotiation objectives should be gained from engagement with key stakeholders. The following is an example of stakeholder support level scale:
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LO 1, AC 1.1

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In addition to organisational power, personal power of each negotiator can influence the outcomes of a negotiation. A good negotiator can leverage different sources of power. Is this statement true?

• A.Yes, because the good negotiator recognises his own power in a negotiation
• B.No, because each person has only one superior source of personal power
• C.Yes, because allsources of power have similar effectiveness in every situation
• D.No, because only organisational power can be leveraged during a negotiation

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