Ann Paxton, the manager of the waste treatment facility in Columbus Park, Ohio, is preparing the annual

expense budget for the next year while eating lunch at her desk. During her lunch she's able to evaluate

costs and expected amount of waste that will be treated at her facility in the upcoming year. Ann's fixed

costs total $2,400,000. The variable cost per gallon of waste equals $.20 for 9,000,000 gallons throughout

the year; or $1,800,000. Based on these figures, Ann expects her total costs to be $4,200,000.

However there has been a decrease of the city's tax revenue and she is almost certain that the city's

controller will reduce the proposed budget by 10 percent. She also anticipates that the waste could go up

by 500,000 gallons and the cost of a new labor contract might increase by more than $300,000. For those

reasons, Ann believes that by submitting a proposed budget of $4,900,000, she will be better off as she's

almost certain that the city controller will reduce her budget by 10%. Is it ethical for Ann to submit a budget for an amount higher than the cost expected to be incurred? Please use valid references to support your findings based upon research.