Final answer:
The false statement is b) The volume variance is due to causes other than volume, as volume variance is directly related to changes in the volume of sales or production.
Step-by-step explanation:
The question is asking to identify the false statement among the provided options concerning budget variance and flexible budgets in management accounting. Going through the options:
- a) The difference between actual results and the master budget is indeed known as the master budget variance, making this statement true.
- b) The volume variance is typically related to the difference in actual versus expected volume sold or produced. Therefore, this statement is false as the volume variance is directly related to volume.
- c) A flexible budget is prepared based on the actual volume achieved during the period, adjusting the budget to reflect the actual activity level. This makes the statement true.
- d) The master budget variance can be split into a volume variance, which is the variance due to changes in the volume of sales or production, and a flexible budget variance, which arises due to the difference between the actual results and what the results would have been if the actual volume had been anticipated is also true. Therefore, the false statement is b) The volume variance is due to causes other than volume.
To summarize, variances are important tools for managerial accounting as they help in understanding the performance of a business against its planned objectives. It is crucial to understand the causes of these variances to manage and improve the business performance effectively.