The Ace Bicycle Company produces bicycles. This year's expected production is 10,000 units. Currently Ace makes the chains for its bicycles. Ace's accountant reports the following costs for making the 10,000 bicycle chains. Description Costs per Costs for 10,000 units units Direct materials $4.00 $ 40,000 Direct labor $2.00 $ 20,000 Variable manufacturing overhead $1.50 $15,000 Inspection, setup, material handling $2,000 Machine rent $3,000 Allocated fixed costs of taxes and insurance $ 30,000 Total $110,000 Ace has received an offer from an outside vendor to supply any number of chains Ace requires at $8.40 per chain. The following additional information is available: . Inspection, setup, and materials handling costs vary with the number of batches in which the chains are produced. Ace produces chains in batch sizes of 1,000 units. Ace estimates that it will produce the 10,000 units in ten batches. Ace rents the machine used to make the chains. If Ace buys all its chains from the outside vendor, it does not need to pay rent on this machine REQUIRED: Assume that if Ace purchases the chains from the outside supplier, the facility where the chains are currently made will remain idle. What is per unit cost if ACE accept the offer? $12.40 None of these