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13-12-2022
Business

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A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $35,100 or reworked for $59,800 and then sold for $107,900. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? Scrap Rework (a) Scrap or Rework Analysis Revenue Costs Income (loss) $ 0 $ 0 Incremental income (or loss) (b) The company should

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