What do we do?

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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

An investigation needs to be performed to identify what occurred. Based on the thresholds for review, the materials price, labor rate, and labor efficiency variances are all in question. 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 who would you talk to in order to figure out what caused the variances. Given that there are three variances to review, you must list at least three employee positions that you might question.
2. Provide at least one question for each of the three people that you listed above. The questions must differ from person to person. Create your questions to be specific for the role within the company that the person has.