QS 23-10 (Algo) Scrap or rework LO P2 Rosa Company produced 1,275 defective phones due to a production error. The phones had cost $63,000 to produce. A salvage company will buy the defective phones as scrap for $51,000. It would cost Rosa $107,100 to rework the phones. If the phones are reworked, Rosa could sell them for $183,600. (a) Prepare a scrap or rework analysis of income effects. (b) Should Rosa scrap or rework the phones? Scrap Rework (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income (b) The company should