please help me letter c, thank you The U Oil Refinery is presently operating on a 60% capacity. Its budgetedoperating costs for its processing departments are shown below:60%80%100%ShutdownСарасityThroughput (liters)600,000800,0001,000,000Operating Costs:Cracking departmentTreating departmentSolvent dewaxing departmentSolvent extraction departmentFiltering departmentP2,300,000400,000750,000560,000P700,000160,000P1,600,000308,000P1,900,000360,000670,000200,000140,000560,000380,000744,000480,000194,000800,000840,000REQUIRED:1. In each of the following cases, indicate in one short sentence the appropriatemanagement decision. Treat the cases independently. Show the computationsnecessary to justify your answers.a. 200,000 liters of fuel is on hand. The refinery must decide whether it is moreprofitable to sell it as fuel oil, or to reprocess it further and crack it intogasoline. The following additional facts are available:Cracking yields: 75% gasoline; 15% fuel oil; and 10% loss.Current prices: fuel oil, P35 per liter; gasoline, P42 per liter.b. The refinery has 400,000 liters of kerosene. It must decide whether to processor sell the kerosene after passing it through the treating department, or crack itinto its gasoline contents. Additional information is as follows:Cracking yields: 85% fuel oil; fuel oil, 5%; and 10% loss.Current prices: refined kerosene, P38 per liter; fuel oil, P35liter; gasoline, P42 per liter.perc. The refinery can purchase an additional 200,000 liters of cylinder stock. Theusual bargaining process will determine the final price. Management isinterested in knowing how high a price it can pay and still make a profit. Thestock purchased would be processed into conventional bright stock and sold assuch. The process would require the following operations- solvent dewaxing,solvent extraction, and filtering. Additional information is as follows: Cylinder stock yields: 90% bright stock; 5% petrolatum; and5% loss.Current prices: bright stock, P46 per liter; petrolatum, nomarket at present.

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c. The refinery can purchase an additional 200,000 liters of cylinder stock. The usual bargaining process will determine the final price. Management is interested in knowing how high a price it can pay and still make a profit. The stock purchased would be processed into conventional bright stock and sold as such. The process would require the following operations- solvent dewaxing, solvent extraction, and filtering. Additional information is as follows:

c. The refinery can purchase an additional 200,000 liters of cylinder stock. The usual bargaining process will determine the final price. Management is interested in knowing how high a price it can pay and still make a profit. The stock purchased would be processed into conventional bright stock and sold as such. The process would require the following operations- solvent dewaxing, solvent extraction, and filtering. Additional information is as follows:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 3BE

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