Vaughn, Inc. has 9800 obsolete calculators, which are carried in inventory at a cost of $20400. If the calculators are scrapped, they can be sold for $1.20 each (for parts). If they are repackaged, at a cost of $15800, they could be sold to toy stores for $2.60 per unit. What alternative should be chosen, and why?

Scrap; incremental loss is $8640

Scrap; operating income is $2080 greater

Repackage; receive operating income of $9680

Repackage; revenue is $4600 greater than cost