The Scenario: You accepted a contract using LOE (Level of Effort) as the payment criteria, but at some point your company representative found out what your customers budget for the project was. Your schedule indicates you can do it for significantly below the budget. Your executives want more money and have asked you to justify this with your plan. This is ethically Bad!
First, the right move here is to get another job. If they get away with it once they will do it over and over again
The process is simple: take the difference in cost and spread it over the tasks in the schedule
You may need to maintain 2 schedules -- 1 real and 1 for payment (Note: This is a crime on a government contract)
I in no way approve of this approach and look for it if I deal with a sub-contractor. As purchaser you should lock down your plan with a baseline and use change control as well as minimize LOE
Plan with Fake Padding
Real Plan