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Cole Petroleum has spent $202,000 to rofino 63.000 gallons of petroleum distillate, which can be sold for $6.30 per gallon Alternatively, Cole can process the distante further and produce 55000 gallons of cleaner fluid The additional processing will cost $175 per gallon of distillate The cleaner fluid can be sold for $9 10 per gallon To sell cleaner fluid, Cole must pay a sales commission of 50 11 per golion and a transportation charge of SO 18 pergation Read the requirements Requirement 1. Fal in the diagram for Cole's alternatives Revenues from Selling es is Joint costs of producing 53000 gallons of petroleum distillate Rovenues from S Cost of processing further processing further The Requirement 2. Identity the sunk cost. Is the sunk cost relevant to Cole's decision? is a sunk cost that differ 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 Coll sell the petroleum distillato or process it into cleaner fuel? Show the expected net revenue difference between the two alternatives. (For the difference in total net revenue, use a parentheses or a minus skyn it processing further will decrease total net revenue) Process Further Sell As is Difference Expected revenue from selling 63,000 gallons of potroleum distillate Expected revenue from selling 55,000 gallons of cleaner fluid Additional costs of processing Total net revenue Decision

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