1. \(\$ 20,000\) of costs have been incurred to produce raw milk. The milk can be sold as is for \(\$ 40,000\) or processed further into ice cream. Processing further will cost \(\$ 25,000\), and the resulting ice cream can be sold for \(\$ 60,000\). Should the company sell the milk as is or process further?
2. \(\$ 50,000\) of costs have been incurred to produce a batch of defective handbags. The handbags can be sold as scrap for \(\$ 15,000\) or reworked into saleable handbags. Rework will cost \(\$ 9,000\), and the reworked handbags can be sold for \(\$ 20,000\). Should the company scrap or rework the handbags?