Question: Problem 1: Jackson Custom Machine Shop has a contract for 130,000 units of a new product. Sam Jumper, the owner, has calculated the cost for

Problem 1: Jackson Custom Machine Shop has a

Problem 1: Jackson Custom Machine Shop has a contract for 130,000 units of a new product. Sam Jumper, the owner, has calculated the cost for three process alternatives. Fixed costs will be: for general-purpose equipment (GPE), $150,000; flexible manufacturing (FMS), $350,000; and dedicated automation (DA), $950,000. Variable costs will be: GPE, $10; FMS, $8; and DA, $6. Calculate the cost for each process. Which should he choose? b. Which process should be chosen if they can make 400,000 units? Solve the problem for the crossover points. Problem 2 Stan Fawcett's company is considering producing a gear assembly that it now purchases from Salt Lake Supply, Inc. Salt Lake supply charges $4 per unit with a minimum order of 3,000 units. Stan estimates that it will cost $15,000 to setup the process and then $1.82 per unit for labor and materials. Determine the number of units where either choice has the same cost

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