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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

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 facility-level activity costs?

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