A company must decide between scrapping or reworking units that do not pass inspection. The company has 16.000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $41,600 or reworked for $75,200 and then sold for $129,600. (a) Prepare a scrap or rework analysis of income effects (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income: Incremental income (b) The company should Rework $ 0 $ 0