To compute the contracted volume in favor of FMS, we need to compare it with the DM option | |||||||
Additional Fixed Cost | $525,000-$225,000 | $300,000 | |||||
Savings in Variable Cost | $14-$13 | $1 | |||||
No of units | Additional Fixed Cost | $300,000 | |||||
Savings in Variable Cost | $1 | ||||||
= | 300,000 | ||||||
If the units are between 75000 & 300,000 it is better to use option FMS vs DM. | |||||||
For Example, if the units are 200,000 | |||||||
Particulars | Option FMS | Option DM | |||||
Fixed Cost | $225,000.00 | $525,000.00 | |||||
Variable cost (200,000 units) | $2,800,000.00 | $2,600,000.00 | |||||
Total Cost | $3,025,000.00 | $3,125,000.00 | |||||
Juryo mume Hop, Inc. has a 1-year contract for the production of 200,000 gear housings for...
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 extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DML The cost data follow: Annual contracted units Annual fixed cost Per unit variable cost General Purpose Equipment (GPE) 225,000 $150,000 $18.00 Flexible...
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 year. Borges 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 follow: General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM) Annual contracted units 200 comma 000200,000 200...
Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-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 (GPE), flexible manufacturing system (FMS), 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 250,000 250,000 250,000 Annual...
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...
Borges Machine Shop, Inc., 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 increased next year. Borges 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 follow. Annual contracted units Annual foxed cost Per unit variable cost General-Purpose Equipment (GPE) 75,000 $100,000 $15.00 Flexible Manufacturing...
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 year. Borges 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 follow: GPE FMS DM Annual Contracted Units $200,000 $200,000 $200,000 Annual Fixed Cost $100,000 $200,000 $500,000 Per unit variable...
Borges Machine Shop, Inc., has a 1-year contract for the production of 225 comma 000225,000 gear housings for a new off-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 aregeneral-purpose equipment (GPE), flexible manufacturing system(FMS), 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 225 comma 000225,000 225...
Borges Machine Shop, Inc., has a 1-year contract for the production of 200 comma 000 gear housings for a new off-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 (GPE), flexible manufacturing system (FMS), 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 comma 000 ...
Can someone please help? Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-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 (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 250,000...
Meile Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Larry 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) LOADING... , 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 250,000 250,000 250,000 ...