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Borg Machine Shootine has a 1-year contract for the production of 200,000 or housings for a new road vehicle Owner Luis Borges hopes the contract

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Borg Machine Shootine has a 1-year contract for the production of 200,000 or housings for a new 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 (OPE), fexible manufacturing system (FMS) and expensive, but elicient, dedicated machine The cost data flow Flexible Manufacturing System (FMS) General Purpose Equipment (GPE) 200.000 $150 000 $18.00 Dedicated Machine (OM) 200.000 $480.000 Arvus contracted units Annual fixed cost Per unit variable cost $200,000 $14.00 The option OP is best when the contracted volume is below unts and your response as a whole number

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