Question 8
A medium-sized multinational company based in US has two business groups (BG), BG1 (for US) and BG2 (for Europe), with position approval hierarchies H1 and H2, respectively.
The company has a policy that only the Controllers and those above them can approve capital Items on requisitions and purchase orders. However, the Purchase Manager (who reports to the Controller) must also be able to authorize capital purchases.
The account range for capital items is: 2000-2599.
The relevant approval limits are:
Purchase Manager in both BGs: $100,000
Controller in BG1: $500,000
Controller in BG2: $200,000
Which two options represent a valid and efficient approval process? (Choose two.)
An employee in BG2 raises a requisition for $5000. This is verified by the employee's manager and forwarded to the group Controller in BG1 who approves it.
An employee in BG2 raises a capital requisition for $250,000, which is verified by the employee's manager and then forwarded to the group Controller in BG2 who approves it.
The buyer in BG1 raises a standard purchase order for $250,000 with the charge account 2106. The Purchase Manager verifies it and forwards it to the controller in BG1 who approves it.
A buyer in BG2 raises a purchase order for $10,000 with charge for inventory items to be stocked in an asset subinventory. The Purchase Manager in BG2 verifies and forwards it to the Controller in BG2.
The shop floor supervisor in BG1 raises a requisition for a new drilling machine for $250,000. The supervisor's manager (Production Manager) verifies the requisition and forwards it to the Controller in BG1 for a final approval.
The Purchase Manager in BG2 raises a requisition for $5000 for computer equipment. The Controller in BG2 approves it and instructs the buyer to ensure a 2-year warranty on this equipment. The buyer in BG2 places the order on the supplier.
Correct answer: CF