A Company Has the Choice of Either Selling 600 Defective

A company has the choice of either selling 600 defective units as scrap or rebuilding them. The company could sell the defective units as they are for $2.00 per unit. Alternatively, it could rebuild them with incremental costs of $0.60 per unit for materials, $1.00 per unit for labor, and $0.80 per unit for overhead, and then sell the rebuilt units for $5.00 each.
- What is the amount of incremental revenue from rebuilding?

A) $0.60 per unit.
B) $7.00 per unit.
C) $2.40 per unit.
D) $5.00 per unit.
E) $3.00 per unit.