Preston Chemical has spent $239,000 to refine 71,000 gallons of acetone, which can be sold for $2.70 a gallon. Alternatively, Preston Chemical can process the acetone further. This processing will yield a total of 64,000 gallons of lacquer thinner that can be sold for $3.50 a gallon. The additional processing will cost $0.70 per gallon of lacquer thinner. To sell the lacquer thinner, Preston Chemical must pay shipping of $0.25 a gallon and administrative expenses of $0.13 a gallon on the thinner. Requirements 1.Fill in the diagram for Preston's decision 2.ldentify the sunk cost. Is the sunk cost relevant to Preston's decision? Why or why not? 3.Should Preston 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 Preston's decision. Sell As Is Acetone sales revenue Sunk cost of producing 71,000 gallons of acetone Cost of further processing Process Further Lacquer thinner sales revenue Requirement 2. The $ differ between the alternatives of selling as is or processing further. Consequently, this sunk cost is is a sunk cost that to the sell-or-process-further decision. Requirement 3. Calculate the expected net revenue difference between the two alternatives. (Leave any unused cells blank.) Preston Chemical Sell As Is or Process Further Analysis Process Further Sell As Is Revenue from selling 71,000 gallons of acetone Revenue from selling 64,000 gallons of lacquer thinner Additional costs required convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision