Which of the following Lessard/Lorange translation approaches forces management to predict the future?
A) setting the budget and tracking performance at the actual rate at the time of the budget.
B) setting the budget at the actual rate at the time of the budget and tracking performance at the actual rate at the end of the period.
C) setting the budget at the projected rate and tracking performance at the rate at the end of the period.
D) updating the budget for the end of period rate and tracking performance at the end of period rate.

Question

Which of the following Lessard/Lorange translation approaches forces management to predict the future?
A) setting the budget and tracking performance at the actual rate at the time of the budget.
B) setting the budget at the actual rate at the time of the budget and tracking performance at the actual rate at the end of the period. 
C) setting the budget at the projected rate and tracking performance at the rate at the end of the period.
D) updating the budget for the end of period rate and tracking performance at the end of period rate.

Quizplus · Accepted Answer

This approach (setting the budget at the projected rate and tracking performance at the rate at the end of the period) forces management to predict the future by requiring them to make projections about the exchange rate and adjust the budget accordingly. It also allows for a more accurate tracking of performance as it is measured at the end of the period, taking into account any fluctuations in the exchange rate.

Which of the Following Lessard/Lorange Translation Approaches Forces Management to Predict