A company must decide between scrapping or reworking units that do not pass inspection. The company...

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A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $54,400 or reworked for $76,800 and then sold for $150,400. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Scrap Rework $ 0 0 Incremental income (b) The company should: A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $54,400 or reworked for $76,800 and then sold for $150,400. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Scrap Rework $ 0 0 Incremental income (b) The company should: