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HELP Preston Chemical has spent $243 000 to refine 70,000 gallons of acotone, which can be sold for $2.10 a gallon. Alternatively, Preston Chemical can
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Preston Chemical has spent $243 000 to refine 70,000 gallons of acotone, which can be sold for $2.10 a gallon. Alternatively, Preston Chemical can process the acetone further This processing will yield a total of 61.000 gallons of lacquer thinner that can be sold for $330 a gallon The additional processing will cost 50 60 per gallon of lacquer thinner. To sell the lacquer thinner, Preston Chemical must pay shipping of 50 21 a gallon and administrative expenses of 50.15 a gallon on the thinner Requirements 1. Idently the sunk cost is the sunk cost relevant to Preston's decision? Why or why not? 2 Should Preston sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives CD 2 m 22 m Requirement 1. Identify the sunk cost is the sunk cost relevant to Proston's decision? Why or why not? The is a sunk cost that differ between alternatives of selling as in or processing further Consequently, this sunk cost of to those or process further dechon Requirement 2. Should Preston sell tho acetone as is or process it into lacquer thinner? Show the expected not revenue difference between the two alternatives Enter a "o" for any zero amounts. Use a minus sign or parentheses in the Difference column the Sell An la amount exceeds the Proceso Further amount) Sell Process Asis Further Difference Sales revenue Less Additional processing costs to convert lacquer thinner Net benefit to operating income per batch /22 pm 10/22 Apm Decision 06/22 Preston Chemical has spent $243 000 to refine 70,000 gallons of acotone, which can be sold for $2.10 a gallon. Alternatively, Preston Chemical can process the acetone further This processing will yield a total of 61.000 gallons of lacquer thinner that can be sold for $330 a gallon The additional processing will cost 50 60 per gallon of lacquer thinner. To sell the lacquer thinner, Preston Chemical must pay shipping of 50 21 a gallon and administrative expenses of 50.15 a gallon on the thinner Requirements 1. Idently the sunk cost is the sunk cost relevant to Preston's decision? Why or why not? 2 Should Preston sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives CD 2 m 22 m Requirement 1. Identify the sunk cost is the sunk cost relevant to Proston's decision? Why or why not? The is a sunk cost that differ between alternatives of selling as in or processing further Consequently, this sunk cost of to those or process further dechon Requirement 2. Should Preston sell tho acetone as is or process it into lacquer thinner? Show the expected not revenue difference between the two alternatives Enter a "o" for any zero amounts. Use a minus sign or parentheses in the Difference column the Sell An la amount exceeds the Proceso Further amount) Sell Process Asis Further Difference Sales revenue Less Additional processing costs to convert lacquer thinner Net benefit to operating income per batch /22 pm 10/22 Apm Decision 06/22 Step by Step Solution
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