Budgeting and Long - plans to implement the strategies. In...

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Budgeting and Long-Range Planning Budgeting and long-range planning are not the same. One important difference is the time period involved . The maximum length of a budget is usually one year, and budgets are often prepared for shorter periods of time, such as a month or a quarter. In contrast, long-range planning usually encompasses a period of at least five years. Helpful Hint In comparing a budget with a long- range plan: 1. Which has more detail? 2. Which is done for a longer period of time? 3. Which is more concerned with short-term goals? A second significant difference is in emphasis . Budgeting focuses on achieving specific short- term goals, such as meeting annual profit objectives. Long-range planning , on the other hand, identifies long-term goals , selects strategies to achieve those goals, and develops policies and
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Unformatted text preview: plans to implement the strategies. In long-range planning, management also considers anticipated trends in the economic and political environment and how the company should cope with them. The final difference between budgeting and long-range planning relates to the amount of detail presented . Budgets , as you will see in this chapter, can be very detailed. Long-range plans contain considerably less detail. The data in long-range plans are intended more for a review of progress toward long-term goals than as a basis of control for achieving specific results. The primary objective of long-range planning is to develop the best strategy to maximize the company's performance over an extended future period....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Budgeting and Long - plans to implement the strategies. In...

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