Question: Based on the total cost, the process that is best suited for the current contracted volume is Borges Machine Shop, Inc., has a I-year contract

Borges Machine Shop, Inc., has a I-year contract for the production of

Based on the total cost, the process that is best suited for the current contracted volume is

Borges Machine Shop, Inc., has a I-year contract for the production of 75,000 gear housings fora new off-road vehicle Owner Luis Borges hopes the contract will be extended and the volume increased nextyear. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DMI The cost data follow: Annual contracted units Annual fixed cost Per unit variable cost Based on the total cost, the process that is best suited for the current contracted volume is F MS GPE General-Purpose Equipment (GPE) 75,000 $125,000 SIS.oo Flexible Manufacturing System (FMS) 75,000 S200,ooo $14.75 Dedicated Machine (0M) 75,000 S480,ooo $13.50

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