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1 of 4 (o complete) v McKnight Petroleum has spent 000 to refine 62,000 gallons of petroleum distillate, which can be sold for s630 per
1 of 4 (o complete) v McKnight Petroleum has spent 000 to refine 62,000 gallons of petroleum distillate, which can be sold for s630 per gallon McKnight can process the dstilat $9.00 per gallon. To sell cleaner fluid, McKnight must pay a sales commission ol $0.10 per gallon and atransportation charge of S0.18 per gallon. Read the requirements. Requirement 1. Fill in the diagram for McKnights alternatives. Revenues from selling as is of producing 62,000 gallons of petroleum Revenues from sing processing Requirement 2. ldentity the sunk cost. ls the sunk cost relevant to McKnight's decision? Y differ between the alternatives of selling as is or processing urther Consequently this T is a sunk cost that (Ente The expected net revenue drse ence between the two alternatwes McKnight sell the petroleum distillate or process it to cleaner uid? Showthe will decrease total net revenue.) Process Further Difference Sell As Is Expected revenue from selling 62,000 gallons of petroleum distillate Expected revenue from selling 57,000 gallons of cleaner nuid ntre of nrn ressing
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