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Example 2 Borges Machine Shop, Inc., has a 1-year contract for the production of 200,000 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 cost data for 3 alternatives: general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: GPE FMS DM $500,000 Annual fixed cost Per unit variable cost $100,000 $15 $200,000 $14 $13 (a) Determine the most economic volume for each process. (b) Based on your answer in (a), what is the best process the volume of 75,000, 275,000, and 375,000