Answer (D) is correct . The standard hours allowed equaled 2,000, and the labor efficiency variance was $1,600 unfavorable; i.e., actual hours exceeded standard hours. The labor efficiency variance equals the standard rate ($8 per hour) times the excess hours. Given that the variance is $1,600, 200 excess hours ($1,600 ¡Â $8) must have been worked. Thus, 2,200 actual hours (2,000 standard + 200 excess) were worked.Answer (A) is incorrect because The 200-hour difference between AH and SH should be added to, not subtracted from, the standard hours allowed.
Answer (B) is incorrect because The difference between AH and SH must be determined using the standard rate per hour. The efficiency variance was also incorrectly treated as favorable and subtracted from the SH.
Answer (C) is incorrect because The difference between AH and SH must be determined using the standard rate per hour.
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What were the actual hours worked?
