QS 23-10 (Algo) Scrap or rework LO P2 Rosa Company produced 1,375 defective phones due to a production error. The phones had cost $70,000 to produce. A salvage company will buy the defective phones as scrap for $45,375. It would cost Rosa $123,750 to rework the phones. if the phones are reworked, Rosa could sell them for $184.250. (a) Prepare a scrap or rework analysis of income effects. (b) Should Rosa scrap or rework the phones