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Rosa Company produced 1 , 4 2 5 defective phones due to a production error. The phones had cost $ 6 4 , 0 0

Rosa Company produced 1,425 defective phones due to a production error. The phones had cost $64,000 to produce. A salvage company will buy the defective phones as scrap for $42,750. It would cost Rosa $114,000 to rework the phones. If the phones are reworked, Rosa could sell them for $193,800.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should Rosa scrap or rework the phones?
\table[[(a) Scrap or Rework Analysis,Scrap,Rework],[Revenue from scrapped/reworked units,,],[Cost of reworked units,,],[Income,,],[,,],[(b) The company should:,,]]
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