Elm Street Company incurred $405,000 direct labor costs this year. Manufacturing overhead was applied at a predetermined rate of $6.00 per direct labor hour. The average hourly wage rate was $15 per hour. If actual overhead incurred was $160,000, what was the amount of overapplied or underapplied overhead?

		$2,000 underapplied
		$8,750 underapplied
		$27,000 overapplied
		$162,000 overapplied
		$2,000 overapplied