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Question Help Castilo Chemical has spont $243,000 to refine 72,000 gallons of acetone, which can be sold for $2.30 a Requirements gallon. Alternatively, Castillo Chemical
Question Help Castilo Chemical has spont $243,000 to refine 72,000 gallons of acetone, which can be sold for $2.30 a Requirements gallon. Alternatively, Castillo Chemical can process the acetone further. This processing will yold a total of 1.ideray the sunk cost is the sunk cost relevant to Castillo's decision? Why oy ot? 61,000 gulons of lacquer thinner thut can be sold for $3.50 a gallon. The addibonal processing wllcost2. Should Castilo sell the acetone as is or process i& into lacquer thinner? Show the expected net reven 0.75 per gallon of lacquer thinner. To sell the laxquer thinner, Castilo Chemical must pay shipping of S0 25 a gallon and administrative expenses of $O. 13 a gallon on the thinner difference between the two atematives Requirement 1. Identify the sunk coot. Is the sunk cost velevant to Castillo's decision? Why or why nor? is a sunk cost that The differ between alternatives of selling as is or processing urther Consequenly, this sunik cost of sto the sell or procen frther decision
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