Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings 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 alternatives. 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)

Flexible Manufacturing System (FMS)

Dedicated Machine (DM)

Annual contracted units

250,000

250,000

250,000

Annual fixed cost

$ 100,000

$250,000

$480,000

Per unit variable cost

$18.00

$14.00

$13.00

The option GPE is best when the contracted volume is below nothing units (enter your response as a whole number).

The option FMS is best when the contracted volume is between nothing and nothing units (enter your responses as whole numbers).

The option DM is best when the contracted volume is over nothing units (enter your response as a whole number).