QUESTION 2: (15 marks) Relevant Costs Hunter Woods (HW) manufactures sets of wooden building blocks. It operates in Toronto and sells most of its production to local retailers. Hunter Woods currently produces and sells 45,000 sets of blocks a year but has the capacity to produce a maximum of 50,000. It is early in the year and Hunter Woods has received a request for a special order from a Hamilton retailer who needs 8,000 sets of blocks to sell at World Toys Inc. For consistency, this retailer requires the full order to be filled by a single supplier and is willing to pay $18 per set of blocks. Hunter Woods' income statement from the previous year is as follows: Hunter Woods' variable selling expense is \$2 per set of blocks. The administrative expense is fixed but will increase by $2,000 if the special order is accepted. There will be no variable selling expense associated with this special order, and the variable manufacturing overhead per set of blocks will remain constant. Fixed manufacturing overhead is $75,000 per year. Due to unique specification of the order, Hunter Woods' direct labour cost per sets of blocks for the special order will increase by 5% and its direct material costs per set of blocks for the special order will increase by 10%. Fixed manufacturing overhead and fixed selling expenses will not change. REQUIRED: 1. Calculate the net benefit or cost of this special order to Hunter Woods. Should this special order be accepted? (1 mark) 2. Include both quantitative (11 marks) and qualitative (3 marks) factors in your analysis