A company must decide between scrapping or reworking units that do not pass inspection. The...
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A company must decide between scrapping or reworking units that do not pass inspection. The company has 44,000 defective units that have already cost $288,000 to manufacture. The units can be sold as scrap for $170,400 or reworked for $216,000 and then sold for $407,600. If the company decides to rework the units, incremental income equals:
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$(95,800).
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$21,200.
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$43,200.
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$191,600.
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$237,200.
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