The option GPE is best when the contracted volume is below ________ units The op

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The option GPE is best when the contracted volume is below ________ units
The option FMS is best when the contracted volume is between __________ & ___________ units

The option DM is best when the contracted volume is over ____________ units Secure T https:/www.mathd.com/Student/P rk.aspx?homeworkld 470313064&questionld-1;&flushed; false&cld-; 48999768centerwin.. MGMT3320151Spring2018 Beverly Dovaina & I 3/20/18 11:55 AM Homework: Chapter 7 Homework Save Score: 0.5 of 1 pt 2 of 20 (20 complete) HW Score: 97.5%, 19.5 of 20 pts Question Help * Borges Machine Shop, Inc., has a 1-year contract for the production of 225,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be Problem 7.2 ni rolle ed about extended and the volume increased next year. Borges has developed costs for three altematives. They are general-purpose equipment (GPE), flexible manufactunng system (FMS), and expensive, but officient, dedicated machine (DM). The cost data follow General-Purpose Flexible Manufacturing Dedicated System (FMS) 225,000 $200,000 $14.00 Machine (DM) Annual contracted units Annual foxed cost Per unit variable cost Equipment (GPE) 225,000 $125,000 $15.00 225,000 $500,000 $13.00 PM The option GPE is best when the contracted vol me is belowunits enter your ros onse as a whole nate, Enter your answer in the answer box and then click Check Answer. Check Answer Clear All just 3/16/18 Text Message O (8) YouTube rm praying for you. I know you craigslist: san anton. " MacBook Air

Explanation / Answer

Here for GPE ;

Total cost = 125000 + 15x

for FMS : Total cost = 200000 + 14x

for DM ; Total cost = 500000 + 13x

so now comparing these three equations

125000 + 15x = 200000 + 14x

x = 75000

so option GPE is better when the contract volume is less than 75000 units

Now comparing last two equations

200000 + 14x = 500000 + 13x

x = 300000

so the option FMS is best when the contracted volume is between 75000 to 300000 units

The option DM is best when the contracted volume is over 300000 units.

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