Consider the following set of circumstances for a business:

Materials

SQ SP AQ SP AQ SP AQ AP

$1,500,000

$1,450,000

$1,375,000

$1,525,000

MPV = Unfavorable $150,000

MQV = Favorable $50,000

Labour

SQ SR AQ SR AQ AR

$2,650,000

$2,825,000

$3,100,000

LRV = Unfavorable $275,000

LEV = Unfavorable $175,000

On investigation, the variances have all been traced to the purchasing department. 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. As a result, there was little savings in the way of materials.

Determine what you would do regarding the actions taken by the purchasing department, should the person be terminated, pay for the losses