Exercise 12-20 Evaluating Management Control Systems - Ethical Considerations (LO 12-3, 5, 7)Magnolia Manufacturing makes wing components for large aircraft- Kevin Choi is the production managerresponsible for manufacturing, and Michelle Michaels is the marketing manager Both managers are paid aflat salary and are eligible for a bonus- The bonus is equal to 1 percent of their base salary for every 10percent profit that exceeds a target The maximum bonus is 5 percent of salary Kevin?s base salary is$250000 and Michelle?s is $310000The target profit for this year is $7 million Kevin has read about a new manufacturing technique that wouldincrease annual profit by 20 percent He is unsure whether to employ the new technique this year wait. ornot employ it at all Using the new technique will not affect the target profitRequired:(a) Suppose that profit without using the technique this year will be $7 million By how much will Kevin?sbonus change if he decides to employ the new technique? By how much will Michelle?s bonus change ifKevin decides to employ the new technique?Bonus ChangeKevin?sMichelle?s(b) Suppose that profit without using the technique this year will be $9.5 million By how much will Kevin?sbonus change if he decides to employ the new technique? By how much will Michelle?s bonus change ifKevin decides to employ the new technique?Bonus ChangeKevin?sMichelle?s