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Meile Machine Shop, Inc., has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Larry 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), and expensive, but efficient, dedicated machine (DM). The cost data follow. General-Purpose Flexible Manufacturing Equipment (GPE) System (FMS) Annual contracted units 200,000 200,000 Annual fixed cost $100,000 $200,000 Per unit variable cost $15.00 $14.00 Based on the cost, the process that is best suited for the current contracted volume is Dedicated Machine (DM) 200,000 $500,000 $13.00 FMS GPE DM