Javier Gonzales is the manager of the Repairs and Maintenance Department of JG Industries. He is responsible for preparing his department€™s annual budget. Most managers in the company inflate their budget numbers by at least 10 percent because their bonuses depend upon much below budget their departments operate. Gonzales turned in the following information for his department€™s budget for next year to the company€™s budget committee:

Because the figures for next year are 20 percent above those in this year€™s budget, the budget committee questioned them. Gonzales defended them by saying that he expects a significant increase in activity in his department next year.

What do you think are the real reasons for the increase in the budgeted amounts? What ethical considerations enter into this situation?

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Budget This Year Actual This Year Budget Next Year Supplies abor Utilitics Tools Hand-carried S 20,000 80,000 8,500 12,500 S 16,000 82,000 8,000 9,000 S 24,000 96,000 10,200 15,000 25,000 4,600 2,000 S152,600 16,400 4,200 2,100 $137 700 30,000 5,520 2,400 S183,120 cquipient Cleaning materials Torals