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Smith Chemical has spent $241,000 to refine 73,000 gallons of acntone, which can be sold for 52.00 a gallon. Requirements Alternatively, Smith Chemical can process

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Smith Chemical has spent $241,000 to refine 73,000 gallons of acntone, which can be sold for 52.00 a gallon. Requirements Alternatively, Smith Chemical can process the acetone further. This processing will yield a total of 63,000 gallons of 1. Idently the sunk cost lacquer thinner that can be sold for $3.30 a gallon. The additional processing will cost $0.80 per gallon of lacquer 2. Should Smith sell the thinner. To sell the lacquer thinner, Smith Chemical must pay shipping of 50 25 a gallon and administrative difference between the expenses of $0.13 a gallon on the thinner. Requirement 1. Identify the sunk cost. Is the sunk cost relevant to Smith's decision? Why or why not? The amount spent to refine the acetone a sunk cost that does not differ between alternatives of selling as is or processing further. Consequently, this sunk cost of is irrelevant 10 the sell or process further decision Requirement 2. Should Smith sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the to in the Difference column If the Soll As is amount exceeds the Process Further amount) Sell Process Further Difference Seva ASI Adesional processing costs to concert lacquer Net belooperating income per batch na natin Choose cara anu stor enter any number in the nurses at then to these question 2.00 a gallon Requirements af 63,000 gallons of 1. Identify the sunk cost. Is the sunk cost relevant to Smith's decision? Why or why not? gallon of lacquer 2. Should Smith sell the acetone as is or process it into lacquer thinner? Show the expected net revenue inistrative difference between the two alteratives y not? etween alternatives of selling as is or processing ocess further decision e expected net revenue difference between the two alternatives (Enter a for any zero amounts. Use a minus sign or parentheses cess ther Difference

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