Problem $23-4$A Sell or process LO P$2$

Harold Manufacturing produces denim clothing. This year, it produced $5,170$ denim jackets at a manufacturing cost of $$41\mathrm{.}00$ each.

These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives

for these jackets.

Jackets can be sold as is to a secondhand clothing shop for $$7\mathrm{.}00$ each.

Jackets can be disassembled at a cost of $$31,500$ and sold to a recycler for $$11\mathrm{.}00$ each.

Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to

assemble the good parts of the $5,170$ jackets into only $2,950$ jackets. The remaining pieces of fabric will be discarded. The cost of

reworking the jackets will be $$102,400,$ but the jackets can then be sold for their regular price of $$44\mathrm{.}00$ each.

Required:

Calculate the incremental income.