Tub Co. uses a standard cost system. The following information pertains to direct labor for product B for the month of October:
Standard hours allowed for
actual production 2,000
Actual rate paid per hour $8.40
Standard rate per hour $8.00
Labor efficiency variance $1,600 U
What were the actual hours worked?

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 ÷ $8) must have been worked. Thus, 2,200 actual hours (2,000 standard + 200 excess) were worked.