A company must decide between scrapping or reworking units that do not pass inspection. The company has

$22,000$ defective units that have already cost $$132,000$ to manufacture. The units can be sold as scrap for

$$78,000$ or reworked for $$99,000$ and then sold for $$187,000.$

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

$($b$)$ Should the company sell the units as scrap or rework them?