Question: Dedicated Borges Machine Shop, Inc has a 1-year contract for the production of 225, 000 gear housings for a new off-road vehicle Owner Luis Borges

Dedicated Borges Machine Shop, Inc has a 1-year
Dedicated Borges Machine Shop, Inc has a 1-year contract for the production of 225, 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 officient dedicated machine (DM) The cost data follow General Purpose Flexible Manufacturing Equipment (GPE) System (FMS) Machine (DM) Annual contracted units 225,000 225,000 225,000 $150,000 $250,000 $480,000 Por unit vanable cost $15.00 $14.00 I $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number The option FMS is best when the contracted volume is betwoon I and units (enter your responses as whole numbers) The option DM is best when the contracted volume is over unts (enter your response as a whole number) Annual fixed cost Next N 0

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