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[Marks 4] The motive for creating a budget should guide a manager in choosing the period for the budget. For example, consider budgeting for a
[Marks 4] The motive for creating a budget should guide a manager in choosing the period for the budget. For example, consider budgeting for a new Harley-Davidson 500-cc motorcycle. If the purpose is to budget for the total profitability of this new model, a 5-year period (or more) may be suitable and long enough to cover the product from design to manufacturing, sales, and after-sales support. In contrast, consider budgeting for a seasonal theater production, which is expected to run for a few months. If the purpose is to estimate all cash outlays, a 6-month period from the planning stage to the final performance should suffice. Do you think budgets are typically developed for a specific time period? Explain. What is the difference between Operating and Rolling budget
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