Course Solutions Uncategorized Borges Machine Shop Inc 1 Year Contract Production 250 000 Gear Housings New Road Vehicle Q34313629

Borges Machine Shop Inc 1 Year Contract Production 250 000 Gear Housings New Road Vehicle Q34313629

June 27, 2024June 27, 2024| adminadmin| 0 Comment| 6:26 pm
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Borges Machine​ Shop, Inc., has a​ 1-year contract for theproduction of 250,000 gear housings for a new off-road vehicle.Owner Luis Borges hopes the contract will be extended and thevolume increased next year. Borges has developed costs for threealternatives. They are​ general-purpose equipment​ (GPE), flexiblemanufacturing system​ (FMS), and​ expensive, but​ efficient,dedicated machine​ (DM). The cost data​ follow:

General-Purpose Flexible Manufacturing Equipment (GPE) 250,000 $100,000 $18.00 System (FMS) 250,000 $225,000 $14.00 Machine (DM) Annual contracted units Annual fixed cost Per unit variable cost 250,000 $525,000 $13.00

  1. The option FMS is best when the contracted volume is between____ and ____
    OR

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