Tech case....

please explain work in summary.

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CHAPTER 7 - TECHNICAL CASE Borges Machine Shop, Inc. has a 1-year contract for the production of 200,000 gear housing for a new off-road vehicle owner Luis Borges hopes the contract will be extended and the volume increase next year. Borges has developed costs for three alternatives these are general-purpose equipment (GPE), flexible manufacturing system (FMS) and expensive but efficient dedicated machine (DM) The costs are as follows: GPE FMS DM ANNUAL CONTRACTED UNITS TO BE PRODUCED 200,000 200,000 200,000 ANNUAL FIXED COSTS $100,000 $200,000 $500,000 PER UNIT VARIABLE COSTS $15.00 $14.00 $13.00 INOTICE: Units remain the same but fixed costs increase with the cost of the equipment but per unit costs decrease due to the increased efficiency of the equipment) As the consultant, you need to 1. Determine the most economical volume for each process (the crossover points) 2. Determine which process to select for the contract identified above (200,000 units); 3. Determine the best process for each of the following volumes to be produced 1.75,000 2.275,000 3.375,000 4. If a contract for the second and third years is pending, what the implications for process selection? 5. Prepare a GRAPH showing the FIXED COSTS. TOTAL COSTS (VARIABLE COSTS X QUANTITIES), and CROSSOVER POINTS for each process and ach Vol. II. Write out your work for each show the answer, and prepare a one page summary that answers each of the questions