Meile Machine Shop, Inc., has a 1-year contract for the production of

200,000

gear housings for a new off-road vehicle. Owner Laura Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They are: general-purpose equipment (GPE),

flexible manufacturing system (FMS)

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,

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	200,000	200,000	200,000
Annual fixed cost	$100,000	$200,000	$500,000
Per unit variable cost	$15.00	$14.00	$13.00

Part 2

The option GPE is best when the contracted volume is below

enter your response here

units. (Enter your response as a whole number.)