Vendome Products Will Have a Labor Surplus of 15% in Its

question 7

Multiple Choice

Vendome Products will have a labor surplus of 15% in its non-exempt employee ranks next year because of decreases in sales of its major product line.Vendome will need to consider all of the following alternatives EXCEPT

• A) transferring non-exempt employees working on this product line into exempt-level jobs at Vendome.
• B) workforce reductions of non-exempt employees working on this product line.
• C) cutting wages or hours for non-exempt employees working on this product line.
• D) not replacing non-exempt employees working on this product line who leave Vendome voluntarily.

---

Definitions:

Nonsystematic Risk

Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.

Diversifiable Risk

Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or nonsystematic risk. Nondiversifiable risk refers to systematic or market risk.

Market Risk

Also known as systemic risk, it's the potential for investors to experience losses due to factors that affect the overall performance of the financial markets.

Unique Risk

Referred to as unsystematic risk, it denotes the risk linked to a particular company or sector.