QS 23-10 (Static) Scrap or rework LO P2 Rosa Company produced 1,000 defective phones due to a production error. The phones had cost $60,000 to produce. A salvage company will buy the defective phones as scrap for $30,000. It would cost Rosa $80,000 to rework the phones. If the phones are reworked, Rosa could sell them for $120,000. (a) Prepare a scrap or rework analysis of income effects. b) Should Rosa scrap or rework the phones? a) Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units Cost of reworked units Income (b) The company should: