HighValu Incorporated manufactures a moderately priced set of lawn furniture $($a table and four chairs$)$ that it sells for $$270.$ The company currently manufactures and sells $6,900$ sets per year. The manufacturing costs include $$94$ for direct materials and $$54$ for direct labor per set. The overhead charge per set is $$44,$ which consists entirely of fixed costs.

HighValu is considering a special purchase offer from a large retail firm, which has offered to buy $690$ sets per year for three years at a price of $$186$ per set. HighValu has the available plant capacity to produce the order and expects no other orders or profitable alternative uses of the plant capacity.

Required:

$1.$ What is the total relevant cost per unit to produce the units requested by the retail firm?

$2.$ What is the estimated net effect on annual operating income if HighValu accepts the special sales order?