Budgetary slack and ethics. (CMA) Marge Atkins, the budget manager at the Norton Company, a manufacturer of infant furniture and carriages, is working on the 2008 annual budget. In discussions with Scott Ford, the sales manager, Atkins discovers that Ford’s sales projections are lower than what Ford believes is actually achievable. When Atkins asked Ford about this, Ford said, “Well, we don’t want to fall short of the sales projections, so we generally give ourselves a little breathing room by lowering the sales projections anywhere from 5 to 10%.” Atkins also finds that Pete Granger, the production manager, makes similar adjustments. He pads budgeted costs, adding 10% to estimated costs.

Required As a management accountant, should Marge Atkins take the position that the behaviour described by Scott Ford and Pete Granger is unethical? Refer to the Code of Professional Ethics described in Chapter 1.

COLLABORATIVE LEARNING PROBLEM