$3$

Rosa Company produced $1,200$ defective phones due to a production error. The phones had cost $$62,000$ to produce. A salvage company will buy the defective phones as scrap for $$37,200.$ It would cost Rosa $$108,000$ to rework the phones. If the phones are reworked, Rosa could sell them for $$160,800.$

$04$:$22$:$22$

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

$($b$)$ Should Rosa scrap or rework the phones?

$\backslash$table$[[($a$)$ Scrap or Rework Analysis,Scrap,Rework$],[$Revenue from scrapped$/$reworked units,,$],[$Cost of reworked units,,$],[$Income$,,],[,,],[,,]]$