Chapter 2, Problem 2.5DC

The Expenditure Approval Process

Roberto is the plant superintendent of a small manufacturing company that is owned by a large corporation. The corporation has a policy that any expenditure over $1,000 must be approved by the chief financial officer in the corporate headquarters. The approval process takes a minimum of three weeks. Roberto would like to order a new labeling machine that is expected to reduce costs and pay for itself in six months. The machine costs $2,200, but Roberto can buy the sales rep’s demo for $1,800. Roberto has asked the sales rep to send two separate bills for $900 each.

What would you do if you were the sales rep? Do you agree or disagree with Roberto’s actions? What do you think about the corporate policy?