A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that cost $5.50 per unit to manufacture. The units can be a) sold as is for $3.40 each, or b) reworked for $4.50 each and then sold for the full price of $8.90 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.) Sale as Scrap Rework Incremental income (loss) The company should: Varto Company has 8,800 units of its sole product in inventory that it produced last year at a cost of $35 each. This year's model is superior to last year's, and the 8,800 units cannot be sold at last year's regular selling price of $47 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $12 each or (2) they can be processed further at a cost of $146,800 and then sold for $28 each. Should Varto sell the products as is or process further and then sell them? INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should