Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,280 denim jackets at a cost of $98,400. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,680. 2. Jackets can be disassembled at a cost of $6,560 and sold to a recycler for $39,360. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $111,520, and the jackets can then be sold for $147,600. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework