Question: Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 225,000 $100,000 $18.00 Flexible Manufacturing System (FMS) 225,000 $200,000 $14.50 Dedicated Machine

Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 225,000 $100,000 $18.00 Flexible Manufacturing System (FMS) 225,000 $200,000 $14.50 Dedicated Machine (DM) 225,000 $525,000 $13.75 Borges Machine Shop, Inc., has a 1-year contract for the production of 225,000 gear housings for a new off-road vehicle. Owner Luis Borges hop for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated Annual contracted units Annual fixed cost Per unit variable cost Based on the cost the process that is best suited for the current contracted volume is General Purpose Flexible Manufacturi Equipment (GPE) System (FMS) 225,000 225,000 $100,000 $200,000 $18.00 $14.50 DM FMS GPE Points: #ff-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs and expensive, but efficient, dedicated machine (DM). The cost data follow: neral-Purpose Flexible Manufacturing uipment (GPE) System (FMS) 225,000 225,000 $100,000 $200,000 $18.00 $14.50 Dedicated Machine (DM) 225,000 $525,000 $13.75

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