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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 $150,000 $18.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number). Annual contracted units Annual fixed cost Per unit variable cost Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 $500,000 $13.00

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 $150,000 $18.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number). Annual contracted units Annual fixed cost Per unit variable cost Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 $500,000 $13.00

Practical Management Science
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: The option GPE is best when the contracted volume is below Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 250,000 $150,000 $18.00 units (enter your response as a whole number). Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 $500,000 $13.00
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: The option GPE is best when the contracted volume is below Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 250,000 $150,000 $18.00 units (enter your response as a whole number). Flexible Manufacturing System (FMS) 250,000 $250,000 $14.00 Dedicated Machine (DM) 250,000 $500,000 $13.00
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