Vision Chemical has spent $240,000 to refine 72,000 L of acetone, which can be sold for $2.16L. Alternatively. Vision Chemical can process the To sell the lacquer hinner, Vision Chemical Phuoc per thinner that can be sold for $3.2012. The additional processing will cost 80.621. of lacquer thinner, pay . . Requirements 1. Fill in the diagram for Vision's decision Identify the su e sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? Should Vision 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 Vision's decision Sell As is $ Acetone sales revenue S Sunk cost of producing 72,000 L of acetone SD Cost of further processing Process Further Lacquer thinner sales revenue Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? Thes is a sunk cost that between the alternatives of selling as is or processing further. Consequently, this sunk cost is to the sell-or-process-further decision, Requirement 3. Should Vision sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. Calculate the expected net revenue difference between the two alternatives. (Leave any unused cells blank.) Vision Chemical Process Further Sell As Is or Process Further Analysis Sell As Is Revenue from selling 72,000 L of acetone Revenue from selling 60,000 L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision to the sell-or-process further decision. Lacquer thinner sales revenue Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? The $ is a sunk cost that between the alternatives of selling as is or processing further. Consequently, this sunk cost is Requirem 5 or process it into lacquer thinner? Show the expected net revenus difference between the two alternatives. cost of further processing Calculate between the two alternatives. (Leave any unused cells blank.) spent to refine the acetone Vision Chemical Sell As Is or Process Further Analysis Sell As Is Process Further Revenue from selling 72,000 L of acetone Revenue from selling 60,000L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision: to the sell-or-process-further decision Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? The $ is a sunk cost that between the alternatives of selling as is ar processing further. Consequently, this sunk cost is Requirement 3. Should Vision sell the acetone or process Show the expected net revenue difference between the two alternatives. differs Calculate the expected net revenue difference between the any unused cells blank.) does not differ Vision Le Sell As Is or Process Further Analysis Sell As Is Process Further Revenue from selling 72,000 L of acetone Revenue from selling 60,000 L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision: acquer thinner sales revenue to the sell-or-process-further decision, irrelevant relevant Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? The $ is a sunk cost that between the alternatives of selling as is or processing further. Consequently, this sunk cost is Requirement 3. Should Vision sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. Calculate the expected net revenue difference between the two alternatives. (Leave any unused cells blank.) Vision Chemical Sell As Is or Process Further Analysis Sell As is Process Further Revenue from selling 72,000 L of acetone Revenue from selling 60,000 L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision: to the sell-or-process further decision, Requirement 2. Identify the sunk cost. Is the sunk cost relevant to Vision's decision? Why or why not? The $ is a sunk cost that v between the alternatives of selling as is ar processing further. Consequently, this sunk cost is Requirement 3. Should Vision sell the acetone or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. Calculate the expected net revenue difference between the two alternatives. (Leave any unused cells blank.) Vision Chemical Sell As Is or Process Further Analysis Sell As Is Process Further Revenue from selling 72,000 L of acetone Revenue from selling 60,000L of lacquer thinner Additional costs required to convert acetone to lacquer thinner Total net revenue Difference in net revenue Decision Sell acetone as is. Process further into lacquer thinner
