Stenback

Chemical has spent

$ $238,000$

to refine

$71,000$

gallons of$$ acetone, which can be sold for

$ $2\mathrm{.}70$

a gallon.$$ Alternatively,

Stenback

Chemical can process the acetone further. This processing will yield a total of

$59,000$

gallons of lacquer thinner that can be sold for

$ $3\mathrm{.}20$

a gallon. The additional processing will cost

$ $0\mathrm{.}75$

per gallon of lacquer thinner. To sell the lacquer$$ thinner,

Stenback

Chemical must pay shipping of

$ $0\mathrm{.}23$

a gallon and administrative expenses of

$ $0\mathrm{.}11$

a gallon on the thinner.

Read the requirements.

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Question content area bottom

Part $1$

Requirement $1.$ Identify the sunk cost. Is the sunk cost relevant to

Stenback$\text{'}$s

$$decision$?$ Why or why$$ not?

The

$$

is a sunk cost that

$$

differ between alternatives of selling as is or processing

further. Consequently, this sunk cost of

is

irrelevant

to the sell or process further decision.