A company must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $5.50 per unit to manufacture. The units can be sold as is for $3.20 each, or they can be reworked for $4.70 each and then sold for the full price of $8.70 each. If the units are sold as is, the company will be able to build 10,000 replacement units at a cost of $5.50 each, and sell them at the full price of $8.70 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.) Sale as Scrap Rework Incremental income (loss) The company should: Radar Company sells bikes for $430 each. The company currently sells 4,150 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $235 each to make: $175 in variable costs per bike and $60 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 875 bikes for $380 each. Incremental fixed costs to make this order are $41,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order Incremental Incremental incremental Amount per Fixed Income from New Unit Costs Business Sales Variable cost Contribution margin Fixed costs Incremental income (loss) from new business The company should