Gray Corp. employees work 2 hours on each of the 200 units that they produce and are paid $8 per hour. The standards for Gray Corp. indicate that employees should be paid $7 per hour and should spend 1.75 hours working on each unit.

What is the Direct Labor Efficiency Variance?

• A.

  $400 Favorable

• B.

  $400 Unfavorable

• C.

  $350 Favorable

• D.

  $350 Unfavorable