28) Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: 28) Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. Collections are expected to be 90% in the month of sale and 10% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,700. Monthly depreciation is $16,000. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Inventory Property, plant and equipment, net of $502,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 19,000 77,000 157,500 1,002,000 $ 1.255,500 $ 272,000 780,000 203,500 $ 1.255,500 Accounts payable at the end of December would be: A) $135,000 B) $231,000 C) 596,000 D) $240,000 29) 29) In a flexible budget, what will happen to fixed costs as the activity level increases? A) The fixed cost per unit will increase. B) The fixed cost per unit will decrease. C) The fixed cost per unit will remain unchanged. D) Fixed costs are not included in a flexible budget. 30) 30) A budget that is based on the actual activity of a period is known as a: A) master budget. B) static budget. C) continuous budget. D) flexible budget