Answer:
the best option is number 1, sell the jackets to a secondhand store at $8 will yield $40,960 in profits
Step-by-step explanation:
the previous manufacturing costs can be considered sunk costs because they cannot be recovered, so we must analyze the options to determine which one yields the highest profit.
option 1
sell 5,120 jackets to secondhand stores at $8 each, profit = $40,960
option 2
disassemble the jackets and sell them at $12 each, profit = $61,440 - $32,200 (disassembling costs) = $29,240
option 3
rework the jackets, profit = ($45 x 2,900) - $101,700 = $28,800
the best option is number 1, sell the jackets to a secondhand store at $8 will yield $40,960 in profits