5.

Rock Bottom's Brew is a successful brewery engaged in the development and production of specialty micro brews. It uses manufacturing cost hierarchy to allocate costs to various activities.

During the past year, it has incurred:

Cost	Description
$725,000	Product development costs
$475,000	Materials handling costs
$1,250,000	Production line labor costs
$450,000	Production setup costs
$250,000	Power costs (for cooling beer and running equipment)
$875,000	Manufacturing facility management costs

Using the manufacturing cost hierarchy, what is the total cost that would be classified as unit-level activity costs?

A)	$ 425,000
B)	$1,250,000
C)	$1,975,000
D)	$1,945,000

6.

Doggle, Inc. has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows:

Maintenance	$400,000
Inspection	200,000

The following data have been assembled for use in developing a bid for a proposed job:

Direct materials	$3,000
Direct labor	$8,000
Machine-hours	200
Number of inspections	2
Direct labor-hours	400

The practical capacity of machine-hours for all jobs during the year is 12,500, and for inspections is 400. These are the cost drivers for maintenance and inspection costs, respectively.

Using the appropriate cost drivers, the total cost of the potential job is:

A)	$11,000
B)	$18,400
C)	$16,300
D)	$36,800