Kelsey, Inc -Refer to Kelsey, Inc

Kelsey, Inc.Kelsey, Inc. produces plastic grocery bags. Kelsey has developed a static budget for the month of August, which is based on 9,000 direct labour hours. During the quarter, the actual activity was 10,000 direct labour hours. Data for August are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(9,000 \text { hours }) } &\underline{(10,000 \text { hours }) }\\\text { Direct labour } & \$ 117,000 & \$ 120,000 \\\text { Power (variable cost) } & 45,000 & 50,000 \\\text { Salary of plant superv isor } &\underline{ 5,000} &\underline{ 5,000} \\\text { Total } & \underline{\$ 167,000} & \underline{\$ 175,000}\end{array}$

-Refer to Kelsey, Inc. What can be concluded when comparing the static budget to the actual costs?

A) The salary of the plant supervisor is fixed.
B) Immediate action is needed to reduce costs.
C) The plant manager was clearly not efficient.
D) The manager spent more than should have been spent.