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: Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 250,000 $125,000 $15.00 Flexible Manufacturing System (FMS) 250,000 $225,000 $14.00 Dedicated Machine (DM) 250,000 $480,000 $13.00 If the contract for the second and third years is pending, for demand below 100,000 units, option is the best alternative for Luis. For demand above 255,000 units, option is the best alternative for Luis