Question: -Based on the total cost, the process that is best suites for the current contracted volume is FMS, DM, GPE? -Suppose the contracted volume changes

-Based on the total cost, the process that is best suites for the current contracted volume is FMS, DM, GPE?

-Suppose the contracted volume changes to 275,000 gear housings. Based on the total cost, the process that is best suited for the new volume is FMS, DM, GPE?

-Supposed the contracted volume chnahes to 375,000 gear housings. Based on the total costs, the process that is best suites for the new volume is FMS, DM, GPE?

Borges Machine Shop, Inc. has a 1-year contract for the production of 75,000 gear housing for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three stratives. They are general purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient dedicated machine (DM). The cost data follow General Purpose Equipment (GPE) 75,000 $125,000 $16.00 Annual contracted units Annual fixed cost Per unit variable cost Flexible Manufacturing System (FMS) 75.000 $225,000 $14.50 Dedicated Machine (DM) 75,000 $480,000 $13.00 Based on the total cost the process that is best suited for the current contracted volume is FMS DM GPE

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