A company must decide between scrapping or reworking units that do not pass inspection. The company has 44,000 defective units that have already cost $288,000 to manufacture. The units can be sold as scrap for $170,400 or reworked for $216,000 and then sold for $407,600. If the company decides to rework the units, incremental income equals:
$(95,800).
$21,200.
$43,200.
$191,600.
$237,200.