Amy Turner is the newly appointed chief accountant at Satellite Data Components (SDC), which designs and manufactures data components for the satellite and car industries. One of Amy’s early tasks is to review the budgeting and planning system. From her initial enquiries, she finds the issue of ‘budgetary slack’ being mentioned by a number of managers.

Required
(a) Explain what budgetary slack is and why it might be a problem.
(b) What advice would you offer to Amy regarding her course of action with respect to budgetary slack?