In the paper, we study a flexible assembly line design problem with equipment decisions. We assume the task times and equipment costs are correlated in the sense that for all tasks the cheaper equipment gives no smaller task time. Given the cycle time and number of workstations we aim to find the assignment of tasks and equipment to the workstations so as to minimise the total equipment cost. We develop a branch and bound algorithm that uses powerful lower bounds and reduction mechanisms. Our computational experiments have revealed that our algorithm can solve large-sized problem instances in reasonable solution times.