Java Gonzales is the manager of the Repairs and Maintenance Department of JG Industries. He is responsible for preparing his departments annual budget. Most managers in the company inflate their budget numbers by at least 10% because their bonuses depend upon how much below budget their department operates. Gonzales turned in the following information for his departments 2008 budget to the companys budget committee: Budget 2007 Actual 2007 Budget 2008 Supplies $ 20,000 $ 16,000 $ 24,000 Labour 80,000 82,000 96,000 Utilities 8,500 8,000 10,200 Tools 12,500 9,000 15,000 Hand-carried equipment 25,000 16,400 30,000 Cleaning Materials 4,600 4,200 5,520 Miscellaneous 2,000 2,100 2,400 ---------------- ---------------- --------------- 152,600 137,700 183,120 ======== ========= ========= Because the figures for 2008 are 20% above those in the 2007 budget, the budget committee questioned them. Gonzales defended them by saying that he expects a significant increase in activity in his department in 2008. What do you think are the real reasons for the increase in the budgeted amounts? What ethical considerations enter into this situation