Question: Borges Machine Shop, Inc. has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the

Borges Machine Shop, Inc. has a 1-year contract
Borges Machine Shop, Inc. has a 1-year contract
Borges Machine Shop, Inc. has a 1-year contract for the production of 200,000 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 oquipment (GPE). flexible 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 200,000 200,000 200.000 Annual foxed cost $150,000 $200.000 $480,000 Per unit variable cost $18.00 $14.00 $13.00 lul The option GPE is best when the contracted volume is below units fenter your response as a whole number). the www

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