Exercise $23-4($Algo$)$ Scrap or rework LO P$2$

A company must decide between scrapping or reworking units that do not pass inspection. The company has $10,000$ defective units that have already cost $$132,000$ to manufacture. The units can be sold as scrap for $$27,000$ or reworked for $$45,000$ and then sold for $$83,000.$

$($a$)$ Prepare a scrap or rework analysis of income effects.

$($b$)$ Should the company sell the units as scrap or rework them?