Scenario iii: goodmark company produces two types of birthday cards: scented and regular. during the year, 20,000 scented cards and 200,000 regular cards were produced. goodmark has two production departments: cutting and printing. direct labor hours are used to assign the overhead of cutting and machine hours are used for printing. the data for the two producing departments are given below: cutting printing total direct labor hours: scented 10,000 10,000 20,000 regular 150,000 10,000 160,000 total 160,000 20,000 180,000 machine hours: scented 2,000 8,000 10,000 regular 8,000 72,000 80,000 10,000 80,000 90,000 overhead costs $216,000 $504,000 $720,000

Consider two cigarette companies, pm inc. and brown inc. if neither company advertises, the two companies split the market and earn $50 million each. if they both advertise, they again split the market, but profits are lower by $10 million since each company must bear the cost of advertising. yet if one company advertises while the other does not, the one that advertises attracts customers from the other. in this case, the company that advertises earns $60 million while the company that does not advertise earns only $30 million. if these two companies collude and agree upon the best joint strategy, a. neither company will advertise. b. both companies will advertise. c. pm inc. will advertise but brown inc. will not. d. brown inc. will advertise but pm inc. will not.