Thread Head Clothing Ltd. manufactures t-shirts. The Athletic Division sells its t-shirts for $9 to outsiders. T-shirts have manufacturing variable and fixed costs of $2.75 and $0.75, respectively. The division's total fixed manufacturing costs are $37,500 at the normal volume of 50,000 units. The Mountain Wear Division has offered to buy 5,000 t-shirts at the full cost of $3.50. They can sell the shirts for $10. The Athletic Division does not have excess capacity but could produce the 5,000 t-shirts using overtime. This would increase variable costs by $0.25 per unit and fixed costs by $6,250. Required 1. Determine the effect on corporate operating income if the Athletic division: a) Reduces regular sales to create the needed capacity b) Uses overtime to produce the 5,000 t-shirts