Question: Meile Machine Shop, Inc., has a 1 - year contract for the production of 7 5 comma 0 0 0 gear housings for a new

Meile Machine Shop, Inc., has a1-year contract for the production of 75 comma 000 gear housings for a new off-road vehicle. Owner Laura Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They are: general-purpose equipment(GPE), flexible manufacturing system (FMS)LOADING..., and expensive but efficient dedicated machine(DM). The cost data follow:
General-Purpose Equipment(GPE)
Flexible Manufacturing System(FMS)
Dedicated Machine(DM)
Annual contracted units
75 comma 000
75 comma 000
75 comma 000
Annual fixed cost
$ 100 comma 000
$ 200 comma 000
$ 500 comma 000
Per unit variable cost
$ 15.00
$ 14.00
$ 13.00
Part 3
Suppose the contracted volume changes to 275 comma 000 gear housings. Based on the total cost, the process that is best suited for the new volume is

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