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Prosco Ltd. employs a process cost system. Inspection of units occurs at the 50 percent mark. Defective units are then removed from the process, and their cost ($4.50) is absorbed by the good units. Prosco has recently been approached by a firm wishing to buy the defective units for a special use. The firm would require Prosco to modify the defective units at a unit cost of $2.00. If Prosco sells the defective units to the firm for $5.00 each, how would Prosco's reported income be affected?A)It would decrease by $4.50 per unit sold.B)It would increase by $3.00 per unit sold.C)It would decrease by $1.50 per unit sold.D) It would increase by $5.00 per unit sold
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