Ed was an independent owner of a chain of TV stores. He successfully got customers into his store by cutting his prices on widely advertised name-brand products in order to sell other products for which he received a bigger profit. When the manufacturers of three of the name-brand products discovered Ed's actions, they agreed secretly to stop selling him their TVs. The three manufacturers
a. are doing nothing illegal, as they did not get Ed to agree to anything.
b. are free to agree not to deal with Ed since the public can go elsewhere and will not be hurt economically.
c. can choose either as a group to deal or not to deal with any retailer they want.
d. are engaged in a rule of reason violation of the antitrust laws if their action harms competition.
d
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Presley Products Inc is a manufacturer of limited edition dolls. They use operations costing to measure and track the costs incurred for specific product lines. While most of the products do require some machine time, Presley has determined that direct labor hours drive its manufacturing overhead costs. During the month of April, the following data were available for a particular line of dolls:
Direct labor 3,000 hours at $10 per hour Direct materials 4,000 pounds at $2 per pound If total overhead costs during the month totaled $25,000 when a total of 50,000 direct labor hours were worked, what will be the total manufacturing cost for this line of dolls? A) $40,500 B) $44,000 C) $63,000 D) $39,500