A company has the choice of either selling 600 defective units as scrap or rebuilding them. The company could sell the defective units as they are for $8.00 per unit. Alternatively, it could rebuild them with incremental costs of $2.00 per unit for materials, $2.00 per unit for labor, and $1.00 per unit for overhead, and then sell the rebuilt units for $16.00 each. What should the company do?

a) Either choice works because they have the same result

b) Sell the units as scrap

c) Neither choice works because both alternatives produce a loss for the company and the units should be abandoned

d) Throw the units in the trash

e) Rebuild the units

Answer rating: 100% (QA)

Correct answer B Explanation Question A company has the choice of either s... View the full answer