Save Borges Machine Shop, Inc., has a 1-year contract for the production of 225,000 gear housings...
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Save 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 Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 225,000 $100,000 $15.00 Flexible Manufacturing System (FMS) 225,000 Dedicated Machine (DM) $200,000 $14.00 225,000 $500,000 The option GPE is best when the contracted volume is below A units (enter your response as a whole number). $13.00 Save 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 Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 225,000 $100,000 $15.00 Flexible Manufacturing System (FMS) 225,000 Dedicated Machine (DM) $200,000 $14.00 225,000 $500,000 The option GPE is best when the contracted volume is below A units (enter your response as a whole number). $13.00
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