Jay Howard, pres dent of Michigan Mining. Lth, has made budgets a major focus for managers. Making budgot was such an important goal that the only two managers who had missed ther budgets in 207 (ty 3% and 6%, respectivey) had been summarily fired. This caused al managers to be wary when seting their 208 budgets. The Oakside Copper Dvision of Michigan Mining has the following results for 20x7 \#\# (Click the icon to view the 207 results.) Meg Stone, genera manager of Oakside Copper, received a memo from Howard that contained the following: We expect your profit for 208 to bo at kast $311,600 Propare a budgot showing how you plan to accomplsh this Stone was concemed because the market for copper had recently softened. Her market research staff forecast that sales would be at or below the 20x7 level, and prices would akely be besween 50.95 and $0.96 per pound. Her manutacturng manager reported that most of the fixed costs were commated and there were few efficiencies to be gained in the variable costs. He indicated that pechaps a 5% savings in variable costs might be achievable but certainly no more. Read the requinements Requirement 1. Piepare a budget for Stone to submit to headquarters. What dilemmas does Stone face in preparing this budget? Begin by preparing an optimisbic preiminary budget assuming a level sales volume, a $096 per pound price, and a 5% decrease in vanibble costs. Data table Requirements Requirements 1. Prepare a budget for Stone to submit to headquarters. What dilemmas does Stone face in preparing this budget? 2. What problems do you see in the budgeting process at Michigan Mining? 3. Suppose Stone submitted a budget showing a $311,600 profit. It is now late in 208, and she has had a good year. Despite an industry-wide decline in sales, Oakside Copper's sales matched last year's 1.4 million pounds, and the average price per pound was $0.965, nearly at last year's level and well above that forecast. Variable costs were cut by 5% through extensive efforts. Still, profit projections were more than $6,000 below budget. Stone was concerned for her job so she approached the controller and requested that depreciation schedules be changed. By extending the lives of some equipment for two years, depreciation in 208 would be reduced by $16,000. Estimating the economic lives of equipment is difficult, and it would be hard to prove that the old lives were better than the new proposed lives. What should the controller do? What ethical issues does this proposal raise