Wilma Turner, the budget manager at Norton Company, is working on the budget for the forthcoming year. In discussions with Scott Ford, the marketing manager, Wilma discovers that Scott’s projections are 15 to 20% below what he truly believes is feasible. “We always give ourselves some breathing room,” Scott says, “As you know, Roy (the company’s founder) is fanatical about making budget and is not shy about showing his feelings in the bonus check. Plus, everyone around here builds a little cushion; you should too, in your department’s budget.”
Wilma finds Scott’s assessment accurate. When she pushes, Jake Lewis, the production manager, admits to inflating costs by 5% or more. He sees his actions as a valid hedge against unpredictable price swings and efficiency losses. Moreover, he uses the extra allowance for needed repairs and other ancillary costs. “Roy would never spend a dime on something that does not go into the product,” Jake says, “but I need to keep the plant going and this is a way of getting some discretionary funds.”

Required:
What should Wilma do?