Samantha is the production manager for Wentworth Company. Each year, she is involved in the company’s budgeting process. Company President Leslie has asked Samantha to submit the facility’s budgeted production for the upcoming year. Leslie’s typical process is to take the budget that Samantha provides and add 10 percent to it. That amount then becomes Samantha’s target production level for the upcoming year. Additionally, Samantha can earn a bonus only if the facility exceeds the budgeted production level.

Required:

1. Explain any incentive Samantha might have to be dishonest with Leslie about the production level she thinks the facility can achieve.

2. Explain the impact Samantha’s inaccurate production estimates could have on other company employees.