The Sticky Gum Company Assignment | College Homework Help

The Sticky Gum Company has received a special order of 12,000 packages of mint flavored

chewing gum to be shipped by month end at a selling price of $14 each. The company has a

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production capacity of 180,000 mint gum packages a month with total fixed production costs

of $288,000. Presently, the

Fixed Production Costs


Variable Selling Expenses

$ 2.00

Variable Production Costs


company has demand of 170,000 mint gum packages a month at a

selling price of $22 each. For the normal order, the cost of 1 mint gum package is

If, the special order is accepted, the company will not incur any selling expense; however, it

will incur shipping costs of $0.60 per unit. Total Fixed Production Costs would not be affected

by the special order. Should we accept the special order? What would the change in monthly

net operating income? If, the company accepted the special order?