Oh my god. Seriously, you should never run a business.
When you buy a brand new iPhone, you pay for the cost of building an iPhone, plus development, plus the cost of warranty, plus the cost of running a business, plus profit. "Out of warranty repairs" are Apple's way of keeping customers happy without losing money; when you got that refurbished phone Apple only needs to charge the cost of building a phone; plus they get to keep all the good parts in your phone.
They are not "refurbishing" your phone. The case is scratched, the battery is used, in your case the screen is broken. They could have replaced the screen and returned the phone to you with your scratched case and used battery, but they could never sell that as a refurbished phone. Your phone gets sent back to China, where someone removes all the good parts that are still usable, the rest goes into recycling, and then they take all the good parts, add everything that is missing, and turn everything into "refurbished" phones. Parts of your phone will end up in a dozen different "refurbished" phones.