Air Carrier flight crew reported altitude alert while on final approach.

Narrative

We were being vectored for RNAV XX; and I was the Pilot Monitoring. We found ourselves a little high on the path and the PF communicated slowing to fully configure for drag in LVL CHG. The subsequent corrections were working fine and I had no concerns whatsoever regarding the outcome of the approach or being stable at 1000 ft as we converged towards the vertical path. We were fully configured and had the Before Landing Checklist completed early and prior to me looking away at my EFB for a few seconds; and when my scan returned; I realized we had descended through the path. I verbalized the issue and the PF immediately turned off all automation and began making the necessary corrections. The descent was arrested at approximately 1200-1300 ft MSL. Just a second or two later we received an altitude alert from ATC and I then realized field elevation was also set in the MCP (Mode Control Panel). Post correction we smoothly returned to the vertical path; was stable at 1000 ft; and the remainder of the approach was normal. Preventative measures: I was comfortable with the PF's abilities having flown together the day prior and as such let myself become complacent. In addition; somewhere field elevation was set prior to VNAV PTH against procedure. I appreciated the new policy of setting missed approach altitude instead of zeros; however the procedure still seems 'clunky' in some respects. With that said I'm not sure of a better way to accomplish the task. Possibly subscribe to the ILS in ZZZ?