Castillo Chemical has spent $239,000 to refine 78,000 L of acetone, which can be sold for $2.60/L. Alternatively, Castillo Chemical can process the acetone further to yield a total of 61,000 L of lacquer thinner that can be sold for $3.90/L. The additional processing will cost $0.85/L of lacquer thinner. To sell the lacquer thinner, Castillo Chemical must pay shipping of $0.27/L and administrative expenses of $0.13/L on the thinner. () Requirement 1. Fill in the diagram for Castillo's decision. Sell As Is $ Acetone sales revenue $ Sunk cost of producing 78,000 L of acetone $ Process Cost of further processing Further $ Lacquer thinner sales revenue Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Castillo's decision? Why or why not? The S is a sunk cost that between the alternatives of selling as is or processing further. Consequently, this sunk cost is C C Requirements 1. Fill in the diagram for Castillo's decision. 2. Identify the sunk cost. Is the sunk cost relevant to Castillo's decision? Why or why not? 3. Should Castillo sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. to the sell-or-process-further decision. Requirement 3. Should Castillo sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. Calculate the expected net revenue difference between the two alternatives. (Leave any unused cells blank.) Castillo Chemical Sell As Is or Process Further Analysis Sell As Is Process Further Revenue from selling 78,000 L of acetone Revenue from selling 61,000 L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision