Rather than selling it as is as scrap would be the incremental effect on the company's overall profit of reworking and selling the material.
Incremental analysis is a decision-making technique used in economics to determine the true cost difference between alternatives. Incremental analysis, also known as the associated cost approach, marginal analysis, or differential analysis, ignores sunk costs and past costs. The incremental analysis aids in business strategy, including decisions to produce or outsource features.
Incremental analysis is a problem-solving approach that applies accounting information to decision-making. Incremental analysis can identify potential outcomes of one alternative versus another.
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