7

Borpos Machine Shop, Inc. has a 1-year contract for the production of 250,000 gear housing for a new off-road vehicle. Owner Luis Borgen hopen the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE) fexible manufacturing system (FMS), and expensive, but efficient dedicated machine (DM). The cost data follow General Purpose Flexible Manufacturing Dedicated Equipment (GPE) System (FMS) Machine (DM) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $100,000 $225,000 $525,000 Per unit variable cost $16.00 $14.00 $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number) The option FMS is best when the contracted volume is between and units (enter your respoison as whole numbers) The option DM is best when the contracted Volume is over units (enter your response as a whole number)