García Company has 10,600 units of its product that were produced at a cost of $159,000. The units were damaged in a rai

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Garcia Company Has 10 600 Units Of Its Product That Were Produced At A Cost Of 159 000 The Units Were Damaged In A Rai 1 (21.23 KiB) Viewed 54 times

García Company has 10,600 units of its product that were produced at a cost of $159,000. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $31,800, or it can rework the units at a cost of $50,400 and then sell them for $66,300. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: $ 31,800 $ $ 31,800 $ Sell the units as scrap 66,300 50,400 15,900