Fact Pattern: Rosecrans Manufacturing produces kerosene lanterns. The company can sell all of its output. Each unit sells frr $120, and direct materials costing $48 per unit are added at the start of the first operation. Other variable costs are immaterial. Production data for one of its products is presented below Operation 1 Operation 2 Operation 3 Total capacity per year 200,000 units 150,000 units 180,000 units Total output per year 150,000 units 150,000 units 150,000 units Fixed cost of operations $1,200,000 $1,800,000 $2,250,000 Tullahoma Company has offered to perform the Operation 2 function on 1,000 units at a unit price of $40, excluding direct materials cost. Chattanooga Company has offered to perform the Operation 1 function on 1,000 units at a price of $7, excluding direct materials cost. Chickamauga Company has made an offer to perform the Operation 1 function on 5,000 units at a unit cost of $5 (excluding direct materials cost). Which of these mutually exclusive offers is acceptable to Rosecrans? A. Tullahoma's offer B. Chattanooga's offer. C. Chickamauga's offer D. None of the offers should be accepted