$.$ Terry Pinene, new$-$accounts manager at East Bank of Clarion, has been asked to project how many new accounts she will open during $20$x$2.$ The local economy has been growing, and the bank has experienced a $10\%$ increase in the number of new accounts over each of the past five years. In $20$x$1,$ the bank had $10,000$ accounts.Pinene is paid a salary, plus a bonus of $$20$ for every new account above the budgeted amount. Thus, if the annual budget calls for $1,000$ new accounts, and $1,080$ new accounts are obtained, her bonus will be $$1,600(80$ x $$20).$Pineno believes that the local economy will continue to grow at the same rate in $20$x$2$ as it has in recent years. She decided to submit a projection of $800$ new accounts for $20$x$2.$Required:Your consulting firm has been hired by the bank president to make recommendations for improving the bank's operation. Write a small note $(10$ lines Max$)$ to the president defining and explaining the negative consequences of budgetary slack. Also discuss the bank's bonus system for the new$-$accounts manager and how the bonus program tends to encourage budgetary slack. $(4$ marks$)(5$ min$)$Q$2.$ Generally, companies follow one of two broad cost strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Is it possible to follow a strategy that is $"$in the middle"? $(4$ marks$)($Max $5$ lines$)(5$ min

Part A

Q$1.$ Terry Pineno, new$-$accounts manager at East Bank of Clarion, has been asked to project how many new accounts she will open during $202.$ The local economy has been growing, and the bank has experienced a $10\%$ increase in the number of new accounts over each of the past five years. In $201,$ the bank had $10,000$ accounts.

Pineno is paid a salary, plus a bonus of $$20$ for every new account above the budgeted amount. Thus, if the annual budget calls for $1,000$ new accounts, and $1,080$ new accounts are obtained, her bonus will be $$1,600(80\text{'}$ $$20).$

Pineno believes that the local economy will continue to grow at the same rate in $202$ as it has in recent years. She decided to submit a projection of $800$ new accounts for $202.$

Required:

Your consulting firm has been hired by the bank president to make recommendations for improving the bank's operation. Write a small note $(10$ lines Max$)$ to the president defining and explaining the negative consequences of budgetary slack. Also discuss the bank's bonus system for the new$-$accounts manager and how the bonus program tends to encourage budgetary slack. $(4$ marks$)(5$ min$)$