Q1. Tanya Williams is the new accounts manager at Southpac Bank. She has just been asked to estimate how many new bank accounts she will generate during the next year. The Australian economy has been growing and the bank has experienced a 10 per cent increase in the number of bank accounts over each of the past five years. In the year just ended the bank had 10 000 accounts. The new accounts manager is paid a salary plus a bonus of $50 for every new account she generates above the budgeted amount. Thus, if the annual budget calls for 500 new accounts, and 540 new accounts are achieved, Williams' bonus will be $2.000 (40 * $50). Williams believes that the economy will continue to grow at the same rate next year as it has in recent years. She has decided to submit a budgetary projection of 700 new accounts for the coming year. Required: 1. Your consulting firm has been hired by the managing director of the bank to make recommendations for improving its operations. Define and explain the negative consequences of budgetary slack. 2. Discuss how the bonus program may encourage budgetary slack. 3. How might the bank reduce the incentive to create budgetary slack? Q2. Explain whether setting more challenging budget targets will always result in improved performance. Q3. South Hampton University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 30 000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the coming year, despite an increase in fees to $3 000 per subject. The following additional information has been gathered from an examination of university records and conversations with university managers: 1. South Hampton is planning to award scholarships to 200 students, which will cover their fees. 2. The average class has 80 students, and the typical student takes 4 subjects per semester. South Hampton operates 2 semesters per year. 3. The average academic staff salary is $120 000 per annum including on-costs. 4. South Hampton's academic staff are evaluated on the basis of teaching, research, administration and professional/community service. Each of the academic staff teaches the equivalent of three subjects during the academic year. Required: a. Prepare a revenue budget for the upcoming academic year. b. Determine the number of staff needed to cover classes. C. Assume there is a shortage of full-time academic staff. List at least five actions that South Hampton might take to accommodate the growing student numbers