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amp;gt;amp;gt; [Luke Ellison] Today, we will consider an example where a manufacturer must decide whether to scrap or rework defective units. Ellison Enterprises has 10,000 defective units of a product that cost them $30 per unit to manufacture. These defective units are not totally worthless and can still be sold for $20 each. Alternatively, the units can be reworked, which will cost the company $40 per unit, which will allow them to sell the units for $80 each. If Ellison Enterprises decides to rework the units, they will have to forego the opportunity to produce 10,000 new units, which will have an $80 selling price and a $50 cost per unit. The question is, should Ellison Enterprises sell the units as scrap or rework them first before selling them? Letamp;#39;s compare the cost and revenues of each situation. If the company decides to scrap the units, they will still be able to sell them for $20 each. But if they rework the units, they will be able to sell them for $80 each. So i
