Betsy\'s Brew is a successful brewery engaged in the development and production
ID: 2545328 • Letter: B
Question
Betsy'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 $1,450,000 of product development costs, $950,000 of materials handling costs, $2,500,000 of production line labor costs, $900,000 for production setup costs, $500,000 in power costs for cooling beer and running equipment and $1,750,000 for manufacturing facility management. Using the manufacturing cost hierarchy, what is the total cost that would be classified as product-level activity costs? Select one: a. $1,450,000 b. $2,500,000 c. $3,750,000 d. $4,600,000
Explanation / Answer
Answer is $ 14,50,000
Productline activities are those activities that support an entire product line but not necessarily each individual unit. Examples of productline activities are engineering changes made in the assembly line, product design changes, and warehousing and storage costs for each product line
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