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 13,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $40,300 or reworked for $62.400 and then sold for $110,500. (0) 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 Scrap Rework $ 0 $ 0 Incremental income (b) The company should Rework the units