Final answer:
An excess of actual labour hours over standard hours leads to an unfavourable labour efficiency variance, indicating inefficiency in labor usage. Option C.
Step-by-step explanation:
If the actual labour hours worked exceed the standard labour hours allowed, it indicates that more time was spent on a task than was initially planned.
This situation typically results in a variance in labor productivity. Since more hours are used than were allotted for the work, it generally signals an inefficiency. Therefore, the type of variance that occurs is an unfavourable labour efficiency variance (Option C).
This is because labour efficiency variance deals with how well time is managed with respect to the labor involved in producing a good or service. It is a measure of productivity, and thus, the standard labour hours serve as a benchmark for evaluating the effectiveness of the labour used.
When the actual hours exceed the standard, it signifies that labor has been less efficient than the benchmark, leading to an unfavorable variance. Option C.