Question: Borges Machine Shop, Inc. has a 1-year contract for the production of 225.000 gear housing 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 for the production of 225.000 gear housing for a new off-road vehicle. Owner Luis Borges hopes the contrad will be extended and the volume detyrore has developed costs for three motives. They are general purpose equipment (GPE) feb marlecturing system (FMS, and expensive, but cont dedicated machine (Dj The could flow General-Purpose Flexible Manufacturing Dedicated Equipment (GP) System (MS) Machine (OM) Au contracted its 225.000 225.000 225.000 Annual feed cost $100.000 5200,000 $400.000 Perunt variable cost $18.00 514.00 $13.00 it the contract for the second and third years spending for demand below 25,000 unts option is the betternative for Le For demand above 200,000 unts, option is the best wternative forum FUS OPE OM Net

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