Question: Borges Machine Shop, Inc., has a 1-year contract for the production of 250 comma 000250,000 gear housings for a new off-road vehicle, selling for $26

Borges Machine Shop, Inc., has a 1-year contract for the production of

250 comma 000250,000

gear housings for a new off-road vehicle, selling for $26 each. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for two alternatives. They are general-purpose equipment (GPE) and flexible manufacturing system (FMS). The cost data follow:

	General-Purpose Equipment (GPE)	Flexible Manufacturing System (FMS)
Annual contracted units	250,000	250,000
Annual fixed cost	$125,000	$337,000
Per unit variable cost	$ 15.00	$ 14.00

How much profit will Luis Borges make if he sells his expected quantity of 250,000 using the best choice process? Round your answer to the nearest integer.

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