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charle [14.2K]
3 years ago
7

The college of business faculty was evenly​ split; half preferred chalk and blackboards and the other half preferred dry erase m

arkers and whiteboards.​ Reluctantly, the purchasing agent agreed to handle supply of these items. One professor​ didn't want chalk or plain dry erase​ markers; he went directly to a specialty producer of scented dry erase markers. His motto had always been that it was better to ask forgiveness than ask permission.His path around the normal purchasing channel is known as
A. rule circumvention.
B. maverick spending.
C. scofflaw ordering.
D. unauthorized ordering.
Business
1 answer:
s2008m [1.1K]3 years ago
3 0

Answer:

The path around the normal purchasing channel is known as Maverick Spending.

Explanation:

The Maverick spending refers to expenses made from purchases outside the original contract, breaking the rules of previously established processes. In this example, one professor decided to disobey the original agreement and find another supplier, even though that would increase the expense greatly.

This is an actual problem for many different companies that are trying to eliminate by implementing different measures such as <em>spend analysis</em>, <em>a list of verified suppliers</em> or <em>purchasing control</em>.

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Answer:

The incremental profit (loss) for each product  is:

A = $-12,000

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C = $41,000

Explanation:

Split off Point: The split off point is that point in which joint products treated separately and sell them as a unique product.

Incremental Cash flow: The incremental cash flow is that cash flow which show  the difference between the split off sales and normal sales.

Here, incremental means that if split off sales is greater than normal sales than firm is earning profit else the firm will suffer loss.

Steps to compute the incremental cash flows for each products:

Step 1: First write Additional selling price of all three products

Step 2: Than write the Split off selling price of all three products

Step 3: Now take the difference of selling price

Step 4: After that, multiply step 3 with split off sales

Step 5: Than write the additional sales

Step 6: Compare the two sales and analyse whether firm earns profits or suffer a loss, and finally the increment cash flows come.

The calculation is done in attachment sheet.

Thus, the incremental profit (loss) for each product  is:

A = $-12,000

B = $49,000

C = $41,000

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c. gives the same answer regardless of the direction of change.

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