Borges Machine Shop, Inc. has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle Owner Luis Borges hopes the contract will be extended and the volume increased next yearBorges 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 followAnnual contracted unitsAnnual fixed costGeneral PurposeEquipment (GPE)200.000$150.000$15.00Per unit variable costThe option GEE is best when the contracted volume is below units (enter your response as a whole number)Flexible ManufacturingSystem (FMS)200,000$250.000$14.00DedicatedMachine (DM)200.000$525,000$13.00

Given, The cost of general-purpose equipment is as follows,Annual contracted unit = 200,000Annual…

Answered: Borges Machine Shop, Inc. has a 1-year…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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