In determining whether to scrap or to rebuild defective units of product,the cost already incurred in producing the defective units is not relevant.

Question

Quizplus · Accepted Answer

The cost already incurred in producing the defective units is a sunk cost and cannot be recovered. Therefore, it should not be a factor in the decision-making process of whether to scrap or rebuild the defective units. The decision should be based on the costs and benefits of each option moving forward.

In Determining Whether to Scrap or to Rebuild Defective Units