Borges Machine Shop, Inc., has a 1-year contract tor the production of 225,000 gear housings for a new otf-road vehicle. Owner Luis Horges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three altematives. They are general-purpose equipment (GPE) lexible manufacturing system (FMS), and expensive, bul efficient, dedicated machine (DM). The cost dala follow General-Purpose Flexible Manufacturing Annual contracted units Annual fixed cost Per unit variable cost Equipment (GPE) 223,DD0 $150,000 15.00 System (FMS) 225,000 $20D,000 $14.00 Dedicated Machine (DM) 225,000 5500,000 $13.00 The option GPE is best when the contracted volume
PayPal Gateway not configured
PayPal Gateway not configured