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A company must decide between scrapping or reworking units that do not pass inspection. The...

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Accounting

A company must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $49,400 or reworked for $91,200 and then sold for $159,600.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should the company sell the units as scrap or rework them? A company must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units
that have already cost $132,000 to manufacture. The units can be sold as scrap for $49,400 or reworked for $91,200 and then sold for
$159,600.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should the company sell the units as scrap or rework them?
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