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Rouse Petroleum has spent $206,000 to refine 64,000 gallons of petroleum distillate, which can be sold for $6.20 per gallon. Alternatively, Rouse can process
Rouse Petroleum has spent $206,000 to refine 64,000 gallons of petroleum distillate, which can be sold for $6.20 per gallon. Alternatively, Rouse can process the distillate further and produce 54,000 gallons of cleaner fluid. The additional processing will cost $1.70 per gallon of distillate. The cleaner fluid can be sold for $9.30 per gallon. To sell cleaner fluid, Rouse must pay a sales commission of $0.12 per gallon and a transportation charge of $0.18 per gallon. Read the requirements. Requirement 1. Fill in the diagram for Rouse's alternatives. Joint costs of producing 64,000 gallons of petroleum distillate Revenues from selling as is Cost of Revenues from processing further processing further
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