1. Kid toys Inc manufactured 200 racing cars that were defective. The manufacturing costs of the cars were: Direct materials $30 Direct labour 24 Variable overhead 10 Fixed overhead 12 Total cost $76 The racing cars normally sell for $110 each. The company can rework the defective cars, which will cost $25 for direct materials, $10 for direct labour and $5 for variable overhead. No additional fixed overhead will be incurred. Alternatively, company can sell the carb 'as is' for a price of $80. Required: Should the company sell or process the defective cars further