Question: GTO Mfg., Inc. manufactures a single product (A) with the following full unit costs at a volume of 2,000 units:
Direct materials $ 900
Direct labor 360
Manufacturing overhead 600
Selling expenses (50% variable) 300
Administrative expenses 280
Total per unit $2,440
Note that per unit manufacturing overhead costs include $840,000 fixed costs. Note that per unit administrative expenses include $500,000 fixed costs. A company recently approached GTO Mfg.'s management about buying 350 units of product A. GTO Mfg. currently sells its product to dealers for $2,600 per unit. Capacity is sufficient to produce the extra 350 units. No selling expenses would be incurred on the special order. What is the minimum price GTO Mfg. should charge just to break even on the special order?