Problem:
For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead. The Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year.
Required:
If the pre-determined overhead rate was $8.00 per direct labor hour, how many direct labor hours were worked during the year?
a. 18,250 hours
b. 19,500 hours
c. 18,750 hours
d. 18,000 hours
e. 17,750 hours
Note: Please show the work not just the answer.