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, 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.

For full credit:

1) Determine what you would do regarding the actions taken by the purchasing department, should the person be terminated, pay for the losses, etc. Be creative.

2) Respond to one other student's post as if you were another employee at this company. Imagine how you might feel and what you might do after learning about how the student suggested handling the situation.

Just saying something is good, bad, or the like is insufficient. You must provide support for all assertions and valuations made.