A company must decide between scrapping or reworking units that do not pass inspection. The company has $19,000$ defective units that have already cost $$132,000$ to manufacture. The units can be sold as scrap for $$49,400$ or reworked for $$91,200$ and then sold for $$159,600.$

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

$($b$)$ Should the company sell the units as scrap or rework them? A company must decide between scrapping or reworking units that do not pass inspection. The company has $19,000$ defective units

that have already cost $$132,000$ to manufacture. The units can be sold as scrap for $$49,400$ or reworked for $$91,200$ and then sold for

$$159,600.$

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

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