Return to question m. Exercise 23-4 Scrap or rework LO P2 points A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $5.40 per unit to manufacture. The units can be a) sold as is for $2.90 each, or b) reworked for $4.80 each and then sold for the full price of $8.30 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.) & Answer is complete but not entirely correct. Sale as Scrap $ $ Rework (48,000) 83,000 Cost to rework units Sales of reworked units Sales of scrap units Opportunity cost of not making new units Incremental income (loss) 29,000 35,000 70,000 $ 29,000 $ The company should: sell as is