<u>Answer:</u>
<u>Pratt Company should incur additional manufacturing cost of $15,000, since they stands to gain more.</u>
<u>Explanation:</u>
Note that every company usually place more importance to profit first, and tries to reduce losses. if Pratt Company goes with the option of selling for the scrap value, it's profit amounts to only $5,000 ($20,000-$15,000). However, <em>manufacturing further despite the additional cost gives Pratt Company a profit from the transaction of $35,000 ($50,000-$15,000).</em>
So, profit wise, Pratt should incur additional manufacturing cost of $15,000, since they stands to gain more.