Question: Please answer the FMS question. Borges Machine Shop, Inc., has a 1-year contract for the production of 225,000 gear housings for a new off-road vehicle.

Please answer the FMS question.

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 equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: Annual contracted units General Purpose Equipment (GPE) 225,000 $150,000 $16.00 Flexible Manufacturing System (FMS) 225,000 $225,000 $14.00 Dedicated Machine (DM) 225,000 $500,000 $13.00 Annual fixed cost Per unit variable cost The option GPE is best when the contracted volume is below 37500 units (enter your response as a whole number). units (enter your The option FMS is best when the contracted volume is between and responses as whole numbers)

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