A company has the choice of either selling 750 defective units as scrap or rebuilding them. They have already spent $14 per unit making these items. The company could sell the defective units as they are for $8.00 per unit. Alternatively, it could rebuild them with incremental costs of $3.00 per unit for materials, $3.00 per unit for labor, and $1.00 per unit for overhead, and then sell the rebuilt units for $15.00 each. What should the company do?

A)It does not matter because both alternatives have the same result.

B)Neither sell nor rebuild because both alternatives produce a loss. Instead, the company should store the units permanently.

C)Throw the units away.

D)Rebuild the units.

E)Sell the units as scrap.