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Rosa Company produced 1,050 defective phones due to a production error. The phones had cost...

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Accounting

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Rosa Company produced 1,050 defective phones due to a production error. The phones had cost $61,000 to produce. A salvage company will buy the defective phones as scrap for $33,600. It would cost Rosa $94,500 to rework the phones. If the phones are reworked, Rosa could sell them for $144,900. (a) Prepare a scrap or rework analysis of income effects. (b) Should Rosa scrap or rework the phones

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