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in this episode we are going to look at relevant costs in a scrap or rework decision cost incurred in manufacturing units of product that do not meet quality standards or sunk costs they cannot be recovered as long as reworking costs to rework those units to get them to a point where they can be sold as long as those rework costs are recovered through selling the reworked product and the rework does not interfere with normal production the decision should be to rework rather than scrap products for example if abc has 10 000 defective units they cost a dollar to make the units can be scrapped now for 40 cents each in other words they will be able to sell them for 40 cents a piece or they can be reworked at an additional cost of 80 cents per unit if they are reworked the units can be sold for the regular selling price of a dollar fifty reworking those defective units however will prevent the production of ten thousand new units that would sell for a dollar fifty so letamp;#39;s see whet
