Exercise 9-19 (Algo) Determining transfer prices LO C1 The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or carga. The trailers have a market price of $100 each. Each trailer incurs $42 of variable manufacturing costs. The Trailer division has capacity for 22,000 traliers per year and hos fixed costs of $490.000 per year. 1. Assume the Assembly division of Baxter Bicycies wants to buy 5,000 trailers per year from the Trailer division, If the Tralker 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 sells to,700 trailers to outside customers and has excess capacity. The Assembly division wants to buy 5,000 trallers per year from the Trailer division. What is the range of acceptable prices on transfers between divisions