es A company must decide between scrapping or reworking units that do not pass Inspection. The company has 10,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $26,000 or reworked for $46,000 and then sold for $82,000. (a) Prepare a scrap or rework analysis of Income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: Scrap Rework

A company must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $26,000 or reworked for $46,000 and then 501d for $82,000 (a) Piepare a scrap or rework analysis of income effects (b) Should the company sell the units as scrap or rework them