Mulan Carpet produced yards of its economygrade carpet.

In the coloring process, there was a pigment defect, and the

resulting color appeared to be faded. The carpet normally sells for

$ per yard: $ of variable cost per yard and $ of fixed cost per

yard have been assigned to the carpet.The company realizes that it cannot sell the carpet for $ per

yard through its normal channels, unless the coloring process is

repeated. The incremental cost of the process is $ per yard.

However, Practical Home Solutions is willing to buy the carpet in

its current faded condition for $ per yard.Should Mulan repeat the coloring process or sell the carpet to

Practical Home Solutions? What is the incremental benefit?