Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Borges Machine Shop, toc has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes
Borges Machine Shop, toc has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume encreased ned year Borges has developed costs for three alternatives. They are general-purpose equipment (OPE), flexible manufacturing system (FMS), and expensive, but officient, dedicated machine (DM) The cost data follow General-Purpose Equipment (GPE) 75,000 $150.000 $18.00 Flexible Manufacturing System (FMS) 75,000 $250,000 $14.50 Dedicated Machine (DM) 75.000 $500,000 $13.00 Annual contracted units Annual faxed cost Per unit variable cost Based on the total cost, the process that is best suited for the current contracted volume is Suppose the contracted volume changes to 275,000 gear housings Based on the total cost, the process that is best suited for the new volume is Suppose the contracted volume changes to 375,000 gear housings. Based on the total cost, the process that is best suited for the new volume is
Step by Step Solution
★★★★★
3.38 Rating (157 Votes )
There are 3 Steps involved in it
Step: 1
To determine which process is best suited for the different contracted volumes we need to calculate ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started