1. Lawson, Inc. produces plastic grocery bags. Lawson has developed a static budget for the month of July based on output of 8,000 plastic bags. During the quarter, the actual output was was 9,000 plastic bags. Data for July are summarized as follows (all costs are variable costs, except plant supervisor salary)

   	Static budget (8,000 bags)			Actual costs (9,000 bags)
   Direct materials cost		$96,000			$118,000
   Power		40,000			47,000
   Salary of plant supervisor		6,000			6,000
   Total		$142,000			$171,000

   What is the total flexible cost budget for July?

   	A.	$159,000
   	B.	$169,000
   	C.	$171,000
   	D.	$142,000
   	E.	None of these choices is correct.