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Cas:llo Chemical has spent $240,000 to refine 74,000 gallons of acetone, which can be sold for Requirements $2.50 a gailon. Alematively, Castilo Chemical can peocess
Cas:llo Chemical has spent $240,000 to refine 74,000 gallons of acetone, which can be sold for Requirements $2.50 a gailon. Alematively, Castilo Chemical can peocess the acetone furthe. This arocessing 1. Identity the sunk cont. is the sunk cost relevant to Castilos decision? Why or wty wil yiald a tolal of 59,000 gallons of lacquer thinner that can be sold for $3.30 a gallon. The not? additional processing wil cout $0.50 per gallon of lacquer thinnee To sell the lacguer thinner, 2. Should Cestllo sell the aceloce as is or process it into lacquer thinner? Show the Castillo Chemical must pay shipping of 90.26 a galion and adrinistrative expenses of 50.14 a axpected net revenue difference behween the two altematives. galion on the thinner. Requirement 1. Sdanify the surk cost, ts the sunk coet rievant to Cantilors dedsion? Why or why not
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