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A company has the choice of either selling 600 defective units as scrap or rebuilding...

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Accounting

A company has the choice of either selling 600 defective units as scrap or rebuilding them. The company could sell the defective units as they are for $2.00 per unit. Alternatively, it could rebuild them with incremental costs of $0.60 per unit for materials, $1.00 per unit for labor, and $0.80 per unit for overhead, and then sell the rebuilt units for $5.00 each. What is the amount of incremental revenue from rebuilding?

a. $3.00 per unit.

b. $5.00 per unit.

c. $2.40 per unit.

d. $7.00 per unit.

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