23.2GP

Please answer this question. Thank you.

Rosa Company produced 1,400 defective phones due to a production error. The phones had cost $64,000 to produce. A salvage company will buy the defective phones as scrap for $54,600. It would cost Rosa $114,800 to rework the phones. If the phones are reworked, Rosa could sell them for $187,600. (a) Prepare a scrap or rework analysis of income effects. (b) Should Rosa scrap or rework the phones