A company must decide between scrapping or reworking units that do not pass inspection. The company has 13.000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $41,600 or reworked for $58,500 and then sold for $118,300 (a) Prepare a scrap or rework analysis of income effects (b) Should the company sell the units as scrap or rework them? Scrap Rework (a) Scrap or Rework Analysis Revenue from scrappedireworked units Cost of reworked units incomo Incremental income (b) The company should Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 51 pounds of the material, Ike uses 3.5 pounds of the material, and Bix uses 71 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Variable costs per unit Kin $ 170.50 90.00 Ike $123.10 93.00 BEX $ 224.39 147.00 a) Compute contribution margin per pound of material for each product. (b) If demand is limited list the three products in the order in which management should produce and meet demand Product Contribution Margin Kin Iko Bix Contribution margin per pound Order in which management should produce and meet demand