Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. These jackets were damaged in the warehouse during storage. Management investigated

Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets. Transcribed Image Text: 1. Jackets can be sold as is to a secondhand clothing shop for $6 each.
2. Jackets can be disassembled at a cost of $32,000 and sold to a recycler for $12 each.
3. Jackets can be reworked and turned into good jackets. However, with the damage, management esti-
mates it will be able to assemble the good parts of the 5,000 jackets into only 3,000 jackets. The
remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $102,000, but
the jackets can then be sold for their regular price of $45 each.
Required
Which alternative should Harold choose? Show analysis for each alternative.

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