[The following information applies to the questions displayed below.]Sheila Lufty manages the plant that produces dining room furniture for Bastile Furniture Company.Sheila’s annual performance is evaluated based on how well she manages all the costs incurred torun the plant and produce the furniture. For her annual evaluation, the costs incurred for the year arecompared to the budgeted costs that were established at the beginning of the year. Sheila receives alarge bonus if the total costs are less than those budgeted at the beginning of the year.Recently, Sheila provided the following end-of-year explanation to her boss, the division head, RosePantle:Rose, I know that the plant costs were over budget again this year. However, during the year I onlyreceive four reports from accounting about the plant costs. These quarterly reports from accountingtell me what the actual plant costs are each quarter. Because the budget is based on yearly totals, itis diﬃcult to tell from the accounting reports if we are falling behind budget. In addition, the salesdepartment decides how many sets of dining room furniture we will produce during the year. Thisyear, sales demanded 1,000 more dining room sets than budgeted at the beginning of the year.These extra sets increased the plant costs significantly.