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 $ 150 comma 000 $ 250 comma 000 $ 500 comma 000 Per unit variable cost $ 18.00 $ 14.00 $ 13.00

The option GPE is best when the contracted volume is below 25000 units ​(enter your response as a whole​ number).

The option FMS is best when the contracted volume is between 25000 and 250000 units ​(enter your responses as whole​numbers).

The option DM is best when the contracted volume is over ________units ​(enter your response as a whole​ number).

Respuesta :

Answer:

Option GPE is best when the contracted volume is below 100,000.

Option FMS is best when the contracted volume is between 100,000 and 300,000.

Option DM is best when the contracted volume is above 300,000.

Explanation:

Detailed step-wise solution is attached in the image below: