Exercise 25-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass i

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Exercise 25 4 Algo Scrap Or Rework Lo P2 A Company Must Decide Between Scrapping Or Reworking Units That Do Not Pass I 1 (48.73 KiB) Viewed 16 times

Exercise 25-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $46,400 or reworked for $72,000 and then sold for $131,200. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Scrap Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: Rework