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A company must decide between scrapping or reworking units that do not pass inspection. The company has 1 9 , 0 0 0 defective units

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 $64,600 or reworked for $93,100 and then sold for $171,000.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should the company sell the units as scrap or rework them?

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