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Homework: Chapter 8 - Homework Score: 0.5 of 2 pts 11 of % P8-59A (book/static) Noble Chemical has spent $240,000 to refine 71.000 gallons of
Homework: Chapter 8 - Homework Score: 0.5 of 2 pts 11 of % P8-59A (book/static) Noble Chemical has spent $240,000 to refine 71.000 gallons of acetone, which can be sold for $2.30 a gallon. Alternatively, Noble Chemica process the acetone further. This processing will yield a total of 59,000 gallons of lacquer thinner that can be sold for $3.20 a gallon. The additional processing will cost $0.85 per gallon of lacquer thinner. To sell the lacquer thinner, Noble Chemical must pay shipping of $0.24 a gallon and administrative expenses of $0.12 a gallon on the thinner. Requirement 1. Identify the sunk cost. the sunk cost relevant to Noble's decision? Why or why not? The amount spent to refine the acetone is a sunk cost that does not differ between alternatives of selling as is or proces further. Consequently, this sunk cost of $ 240,000 is irrelevant to the sell or process further decision Requirement 2. Should Noble sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between Process Further amount.) Sell Process Further As Is Difference Less Net benefit to operating income per batch Choose from any list or enter any number in the input fields and then click Check Answer. part emain TUIN 11 of 11 (10 complete) HW Score: 41.87%, 8.37 of 20 Question Help ich can be sold for $2.30 a gallon. Alternatively, Noble Chemical con Requirements ons of lacquer thinner that can be sold for $3.20 a gallon. The 1. Identify the sunk cow is the sunk cost relevant to Noble's decision? Why or why not? lacquer thinner, Noble Chemical must pay shipping of $0.24 a 2. Should Noble sell the acetone as is or process it into loquer thinner? Show the expected net revenue difference between the two alternatives decision? Why or why not? differ between alternatives of selling as is or processing to the sell or process further decision Jer thinner? Show the expected net revenue difference between the two alternatives. (Enter a "U" for any zero amounts. Use a minus sign or parentheses in the Difference column if the Sell As is amount exceeds t Sell As Is Process Further Difference
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