Final answer:
The correct statement is that comparing the flexible budget to the 'as-if' budget isolates a change in input price. This is because the flexible budget adapts to actual activity levels, identifying variances due to price or efficiency changes.
Step-by-step explanation:
The true statement among the options provided is that comparing the flexible budget to the 'as-if' budget isolates a change in input price such as budgeted input price versus actual input price. A flexible budget is prepared using actual levels of activity and can be used to compare with the actual results, helping to identify any variances due to changes in price or efficiency. This is distinct from the master budget which is based on planned activity levels and does not adapt to changes in activity levels. The flexible budget compares the actual performance with the budgeted performance for various inputs and identifies the difference or variance. By comparing the flexible budget with the as-if budget, which assumes the budgeted input price, any difference in the input price can be isolated and analyzed.
On the other hand, a budget reconciliation report often includes various variances, not just the difference between actual and budgeted profit. Additionally, activity-based costing (ABC) is a methodology that can indeed be used to evaluate customer profitability, as it assigns overhead costs to products and services based on the actual activities necessary to produce each product or service, thus giving more accurate cost information.