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L4M5 Exam Dumps : Commercial Negotiation

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Commercial Negotiation Questions and Answers

Question 1

Which of the following are typical characteristics of activity-based costing (ABC) method? Select TWO that apply.

Options:

A.

ABC provides the information required to take action and realise improvements

B.

Limited understanding of true costs incurred

C.

ABC has tended to over cost products on long runs and under cost those on short runs

D.

Costs are allocated based on volume

E.

Variable and all related overhead expenses are specifically assigned to a business activity

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Question 2

When engaging in commercial negotiations, it is important to bear in mind that the suppliers need to make a reasonable profit to maintain continuity of supply. It is therefore necessary for the buyer to have a clear understanding of the break-even analysis concept which relates to cost, volume, and profit.

What is 'contribution' in relation to break-even analysis?

Options:

A.

The gains that the supplier receives when the sales revenue exceeds fixed costs

B.

The gains from sales revenue that the supplier is willing to contribute in a profit-sharing contractual arrangement

C.

The gains that the supplier receives when the sales revenue exceeds variable costs

D.

The gains from sales revenue which the supplier retains as reserves to contribute to future development projects

Question 3

Which characteristics are likely to feature within an integrative negotiation?

Maximising the other party’s outcome to enhance relationships

Maximising joint outcomes

Short-term focus

Pursuit of goals held jointly with the other party

Options:

A.

1 and 3 only

B.

1 and 2 only

C.

3 and 4 only

D.

2 and 4 only