In which of the following costing methods, overhead costs are applied in proportion to production volume?
Correct Answer: A
There are 3 major costing methods: Marginal costing * Uses marginal cost of producing addition units * Uses variable cost to derived a unit cost (does not include fixed cost) * Fixed cost treated as a 'period cost' and deducted, as a total amount, from total contribution to profit for the period, in the firm's profit and loss account Absorption costing * Calculates total cost of producing product * In addition to variable cost, a fair proportion of fixed cost is allocated to (absorbed) eachunit of output, as a fixed cost per unit Activity based costing * Similar to absorption costing but with fixed cost allocated to products on the basis of the cost of activities used in producing them LO 2, AC 2.1
Question 57
Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?
Correct Answer: B
Using logic involves applying numerical data and factual evidence to support arguments in a negotiation. Logical reasoning appeals to objective analysis rather than emotional or coercive tactics and is effective in convincing the other party through structured, fact-based arguments, aligning with CIPS's guidance on logical negotiation techniques.
Question 58
Should a buyer use closed questions in a negotiation?
Correct Answer: A
Asking questions the right way is both an art and a science. Ask the question the wrong way, and the other negotiator might act like a turtle, becoming defensive and withdrawing into their shell. Ask the question the right way, and the other negotiator might "spill the beans.". Closed Questions: How and when to use them? Closed questions are those that require a short and focused answer, and are especially helpful in the beginning stages of the negotiation to encourage interaction. They can be used to clarify a point, or to reconfirm certain facts. For example, you can use a closed question to confirm the amount of units the company can produce in a week, or to clarify that what they are really saying is that they don't feel comfortable outsourcing their accounts to India. Most closed questions only require a simple "yes" or "no" response, so there really isn't much room for misinterpretation - great for finding out where both you and they stand.
Question 59
When implementing value analysis or value engineering, which of the following acronyms reminds both buyer and supplier of ideas on removal, substitution and design-out of cost elements?
Correct Answer: B
: Ray Carter coined the mnemonic STOPS WASTE to remind buyers of 10 cost-reduction ideas they can ask for themselves and their suppliers in any situation when considering a key purchase input. Stop Waste by: Standardisation - is there a standard specification? Transportation - is the inbound transport classification appropriate Over-engineered - is the specification too tight? Packaging - can packaging be reduced or eliminated? Substitutes - is there a cheaper substitute material Weight - is there opportunity to reduce weight of the product? Any unnecessary processing - is there any unnecessary design or feature? Supplier's input - are suppliers able to assist with the cost reduction To make - is it more economical to make or buy? Eliminate - if no one uses the feature, can it be eliminated? SAMOA is a useful acronym for checking and testing the information gathered from the Internet: Source Audience Methodology Objectivity Accuracy OWN-IT is acronym for 5 steps in the process of collecting and analysing the data and information needed in any field: Outline Wide search Narrow search Increase your stockpile of information Transform your stockpile into new knowledge A SMART goal is used to help guide goal setting. SMART is an acronym that stands for Specific, Measurable, Achievable, Realistic, and Time-bound.
Question 60
Which of the following are recognised techniques in contract negotiation? Select THREE that apply.
Correct Answer: A,C,F
The question asks about negotiation techniques which are not present in the book. In this question, there are only 3 recognised techniques: - Framing and reframing: A frame is an assumption, or set of assumptions, that guides our attention and behavior. Reframing is the ability to identify and significantly change assumptions or perspectives. Framing has a significant impact on the effectiveness of negotiation outcomes and negotiator working relationships. You can read more on framing and reframing here. - Anchoring: Anchoring bias is well-known cognitive bias in negotiation and in other contexts. The anchoring bias describes the common tendency to give too much weight to the first number put forth in a discussion and then inadequately adjust from that starting point, or the "anchor." We even fixate on anchors when we know they are irrelevant to the discussion at hand. You can read more on anchoring here. - Pacing and leading: Pacing and leading is a two-step lever of persuasion. First - You "match your pace" to the person you want to influence in as many ways as possible. You can do this by mimicking the way the person talks, stands, their appearance, etc. You can also mimic less tangible aspects like the way they act, or their emotional state. Second - Once you've set your pace with someone, lead them to whatever decision or behavior you want them to take! You can read more on pacing and leading here.
