Shane Products manufactures and sells sportswear and sports equipment. The apparel division incurs the following costs for the production of a single t-shirt when 6,000 shirts are produced each year: Direct materials Direct labor $1.25 1.00 Variable overhead .75 .50 $3.50 Fixed overhead Total cost The company sells the t-shirts to retail stores for $7.50. The sports equipment division is doing a promotion whereby each customer that purchases a tennis racket during the month of May receives a free t-shirt. The sports equipment division would like to purchase these shirts from the t-shirt division. Assuming the t-shirt division is at full capacity, what price should they charge such that no additional losses will be incurred if they sell the shirts to the sports equipment division? $4.00 O $3,50 $7.50 $3.00