2 Respond to each of the following scenarios. (a) Stephen is the chief financial officer at George Manufacturing Ltd and made the following comment about budgeting: There is too much uncertainty in our business to make budgeting worthwhile. The prices of our raw materials change, the volume of customer orders fluctuates... there is so much uncertainty that any budget we prepare will end up being wrong. We need to adapt to changes as they occur. (b) Wayne is an accountant who works in local government. When asked about his approach to budgeting, he replied as follows: I get my budgets done very quickly. All I do is take last year's budget figure and increase it by five per cent. The local government environment is stable, and there is no point in making a fresh start with the budget every year. I have been using my approach of just adding five per cent to the previous year's budget for about six years now. I plan to keep doing it that way. (C) Jenny oversees the CDU office of a courier business that has offices throughout Australia. When asked about budgeting for costs, she commented as follows: The company is very cost-conscious. Whenever I send head office my budgeted costs for the coming year, they always cut the budgeted amounts by around 15 per cent. So, when I prepare the budget, I deliberately inflate each item by approximately 15 per cent. I add on 15 per cent, then head office cuts off 15 per cent, and everyone is happy! I get the budget I want, and head office is satisfied that it is cutting costs. (d) Blacktown Ltd is a large company with multiple divisions. Aaron oversees the minor division, and because of this, he has become aware that he gets paid less than the heads of the other divisions. Every year when preparing the budget for his division, Aaron does everything he can to inflate the budgeted amounts overstating expected sales and costs. He uses these budgeted figures as part of his annual appraisal to argue that the division of similar in size to the other divisions and that he should be paid at a similar rate to the leaders of the other divisions