A company must decide between scrapping or reworking units that do not pass inspection. The company has $44,000$ defective units that have already cost $$264,000$ to manufacture. The units can be sold as scrap for $$156,000$ or reworked for $$198,000$ and then sold for $$374,000.$ If the company decides to rework the units, incremental income equals:

Question $19$Answer

a$.$

$$20,000.$

b$.$

$$176,000.$

c$.$

$$(88,000).$

d$.$

$$36,000.$

e$.$

$$218,000.$