Cherry, the management accountant of ACC Manufacturing Company (ACC"), has been working on the budgets for Year 2020 for some of the products. She has interviewed the production and engineering managers for an updated estimates of material costs for the coming year. With the introduction of a new machine, the production manager forecasts a saving in material costs. She submits her work to Arthur, the Financial Controller of ACC. Arthur reviews Cherry's work and comments that the budgeted material costs are too low. He asks Cherry to revise the costs upwards in order to present a lower estimated profit figure. He also advises Cherry that, in case the actual costs of materials are lower than the amount in the budget, budgetary slack can be built, and the final actual profits will easily beat the budgeted one. There is a good chance that higher amount of bonus will be awarded for staff outperforming the forecast. Required: Explain why Arthur behaves in this manner and describe the benefits he expects to realise from the use of budgetary slack. (a) (6 marks) Explain how the use of budgetary slack can adversely affect ACC. (b) (4 marks)