You have discussed with the management of your company the

impact of defective units on the cost of each item of product manufactured.

One of the company's officers expresses the opinion that

the company loses money on reworking defective units. His argument

is that the units should bear the normal costs of materials,

labor, and overhead and should also bear the additional rework

costs. He argues that the defective units should not be reworked

but should be discarded to eliminate this loss. What is your response

to this proposal?

LO.1