Question

Borges Machine​ Shop, Inc., has a​ 1-year contract for the production of 200 comma 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:                                                                                                                                            ​General-Purpose Equipment​ (GPE) Flexible Manufacturing System​ (FMS) Dedicated Machine​ (DM) Annual contracted units 200 comma 000          200 comma 000               200 comma 000       Annual fixed cost $ 100 comma 000          $ 225 comma 000               $ 480 comma 000       Per unit variable cost $ 18.00          $ 14.00               $ 13.00       The option GPE is best when the contracted volume is below 25000 nothing units ​(enter your response as a whole​ number).

Answer 1