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Kevin Jackson is the manager of the Repairs and Maintenance Department of J &B Industries. He is responsible for preparing his department's annual budget. Most
Kevin Jackson is the manager of the Repairs and Maintenance Department of J &B Industries. He is responsible for preparing his department's annual budget. Most managers in the company inflate their budget numbers by atleast 10 percent because their bonuses depend upon how much below budget their departments operate by year end. Jackson turned in the following information for his department's budget for NEXT year to the company's budget committee to be reviewed and approved Actual This Year $20,000 16,000 24,000 Budget This Year Budget Next Year Supplies Labor Utilities Tools Hand-carried equipment Cleaning materials Miscellaneous Totals 80,000 8,500 12,500 25,000 4,600 2,000 82,000 8,000 9,000 16,400 4,200 2,100 96,000 10,200 15,000 30,000 5,520 2,400 $152,600 $137,700 $183,120 the current year's budget. They questioned him about this and he responded by saying that he expects a significant increase in activity in his department next year, so he will need more money to operate effectively. Pretend that you are a member of the budget committee. What do you think about his justification of the 20% increase? Tell me if you agree or disagree and support you answer. Do you think that there is anything "unethical" going on
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