13. Mendoza, Inc. manufactures and sells aluminum dishes for camping and outdoor enthusiasts through a mail order catalog operation. Large rectangular sheets of aluminum are purchased by Mendoza. These sheets are cut down into smaller squares and are then fed into a machine where they are trimmed down into a circular shape. These aluminum circles are then fed into a stamping machine where they are formed into plates and bowls. After production, the dishes are shipped to warehouses where they are packed and then shipped to customers.

Which of the following terms could be used to correctly describe the cost of electricity used to run the stamping machine?

(Points : 3)

direct labor cost administrative cost opportunity cost manufacturing overhead cost

14. Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device.

The salary that Mark earns at his present employ is:

(Points : 3)

a variable cost a fixed cost a product cost an opportunity cost