You have just been hired at ABC Manufacturing, and your supervisor has invited you to sit in on today's budget meeting. You are given a copy of the following proposed budget for next year to review. The budget is being used by ABC to plan for next year. Your supervisor tells you right before the meeting, "We always overestimate because the president always makes us cut the budget by 20%, and besides, I really want to go to that conference in Las Vegas next year." He continued," I have really worked hard this year and put in a lot of overtime so I deserve it."1. Discuss if you think ABC Manufacturing is properly using the budget process to plan for next year's expenses.2. Discuss the comment about the president cutting the budget each year in terms of proper leadership and control?3. Discuss the ethical issues related to inflating the budget

ABC MANUFACTURING Budgeted Income Statement // For the Year Ended Dec. 31, 20XX % INCREASE OVER LAST YEAR REVENUE: Sales 700.000 15% COST OF GOODS SOLD: Cost of Goods Sold 420,000 20% GROSS PROFIT 280,000 EXPENSES: Advertising 9,500 20% Cleaning 1.800 20% Insurance 28,000 20% Phone 3,600 20% Rent 24.000 20% Supplies 6,500 20% Taxes 10,000 20% Training/Education 9.800 100% Utilities 8.500 35% Wages 150,000 Total Expenses 251,700 NET INCOME 28,300