Rosa Company produced $1,000$ defective phones due to a production error. The phones had cost $$60,000$ to produce. A salvage company will buy the defective phones as scrap for $$35,000.$ It would cost Rosa $$88,000$ to rework the phones. If the phones are reworked, Rosa could sell them for $$148,000.$

$($a$)$ Prepare a scrap or rework analysis of income effects.

$($b$)$ Should Rosa scrap or rework the phones?