1) Determine at least three positions (people) within the organization that you would interview in order to determine what went wrong. List two questions for each position (person) that will assist the investigation and state how the answers to the questions will assist in determining the source of the variances. You already know the variances and have the data that allowed for the computations. Don't ask questions that you already have the answer to as a result of the financial data above.

2) After your investigation, it has been determined that the purchasing department employee bought higher quality materials than the specifications call for, but did not confirm the purchase with anyone nor notify anyone of the higher quality. All of the variances above resulted from this one purchasing decision. Decide how management should respond to this error. What should be the repercussion for the employee and the organization?

Consider the following set of circumstances for a business: Materials MPV = Unfavorable $150,000 MQV = Favorable $50,000 Labour SQ SR AQ SR AQ AR LRV = Unfavorable $275,000 LEV = Unfavorable $175,000