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Exercise 22-19 (Algo) Determining transfer prices LO C1 The Traller division of Baxter Bicycles makes...

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Exercise 22-19 (Algo) Determining transfer prices LO C1 The Traller division of Baxter Bicycles makes bike trallers tit. witach to bicycies and can carry children or cargo. The trailers have a market price of $92 each. Each traller incurs $46 of variable manufacturing costs. The Trailer division has capacity for 22.000 trallers peryear and has fixed costs of $550.000 per year. 1. Assume the Assembly division of Baxter Bicycles wants to buy 5,300 trallers per year from the Tralier division. If the Trallet division can sell all of the trailers it manufactures to outside customers (and has no excess capacity), what price should be used on transfers between divisions? 2. Assume the Trailer division currently only seils 9,900 traliers to outside customers and has excess capacity. The Assembly division wants to buy 5,300 trallers per year from the Traller division. What is the range of acceptable prices on transfers between divisions

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