Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges hast 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) 250,000 $125,000 $18.00 Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 Annual contracted units Annual fixed cost $480,000 Per unit variable cost $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number).
Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges hast 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) 250,000 $125,000 $18.00 Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 Annual contracted units Annual fixed cost $480,000 Per unit variable cost $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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![Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 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)
250,000
Annual contracted units
Annual fixed cost
$125,000
Per unit variable cost
$18.00
The option GPE is best when the contracted volume is below
Flexible Manufacturing
System (FMS)
250,000
$250,000
$14.00
D
Dedicated
Machine (DM)
250,000
$480,000
$13.00
units (enter your response as a whole number)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Febc2c420-33e9-450d-8b06-62fac20a7932%2F7e984249-0ad7-4fc8-bd40-dd3ff59bb94c%2Flp64naq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 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)
250,000
Annual contracted units
Annual fixed cost
$125,000
Per unit variable cost
$18.00
The option GPE is best when the contracted volume is below
Flexible Manufacturing
System (FMS)
250,000
$250,000
$14.00
D
Dedicated
Machine (DM)
250,000
$480,000
$13.00
units (enter your response as a whole number)
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