Crawford Chemical has spent $$241,000$ to refine $78,000L$ of acetone, which can be sold for $$\frac{2\mathrm{.}00}{L}.$ Alternatively, Crawford Chemical can process the acetone further to yield a total of $67,000L$ of lacquer thinner that can be sold for $$\frac{3\mathrm{.}90}{?}.$ The additional processing will cost $$\frac{0\mathrm{.}50}{L}$ of lacquer thinner. To sell the lacquer thinner, Crawford Chemical must pay shipping of $$\frac{0\mathrm{.}23}{L}$ and administrative expenses of $$\frac{0\mathrm{.}10}{L}$ on the thinner.

Requirements

Fill in the diagram for Crawford's decision.

Identify the sunk cost Is the sunk cost relevant to Crawford's decision? Why or why not?

Should Crawford sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives.

Requirement $1.$ Fill in the diagram for Crawford's decision.

Sunk cost of producing $78,000L$ of acetone