Question: Problem 7.3 E Question Help Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 gear housings for a new off road

Problem 7.3 E Question Help Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 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 Dedicated Annual contracted units Annual fixed cost Per unit variable cost General Purpose Equipment (GPE) 75,000 $125,000 $16.00 Flexible Manufacturing System (FMS) 75,000 $225,000 $14.00 75,000 $525,000 $13 75 Based on the total cost, the process that is best suited for the current contracted volume

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