Exercise 23-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass inspection. The company has 16.000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $51,200 or reworked for $73,600 and then sold for $148,800. (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 i Cost of reworked units Income Incremental income Scrap Rework es (b) The company should