So I must have underpaid for the workers’ labour. They must have supplied 1200 hours of labour, even though I only paid them wages worth 1000 hours.

Maybe you underpaid for the capital? And where is the compensation for the risk you took? Maybe that's where the extra $200 came from. Or maybe it was the work you did in organizing the labor that was done, in procuring the capital tools, etc.

Marx was right about the politics of capitalism and about the divergent interest of economic classes. But the exchange value of any commodity is the exchange value of its least expensive substitute. Demand determines exchange value, even over the long term. If no one wants your concrete life preserver, the cost of making it is completely irrelevant. Marx understood what drove capitalists to be assholes, but he had no clue as to how they made their money.