This Question Contains Two Parts; Be Sure to Answer Both

question 35

Essay

This question contains two parts; be sure to answer both.
First, what is the grapevine, and when does the grapevine flourish and thrive?
Second, suppose that you manage a small laboratory that develops fragrances (men's colognes, women's perfumes, unisex deodorants). The office grapevine is thriving; employees believe that the company is about to be purchased by a much larger firm, and that the result will be a move to another state, decreased benefits, and massive layoffs. While the company is under negotiations to be purchased, there will be no move or change in benefits based on the purchase. Layoffs could occur, but it's hard to say at this point. Describe several ways that you might get the grapevine under control.

---

Definitions:

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, used to cover fixed costs and contribute to net income.

Fixed Costs

Expenses that do not change with the level of production or sales over a relevant period, such as rent, salaries, and insurance.

Break-even Sales

The amount of sales needed to cover all fixed and variable costs, resulting in zero profit.

Selling Price

The amount for which a good or service is sold to customers, determining the revenue generated from sales.