1. The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a market price of $106 each. Each trailer incurs $45 of variable manufacturing costs. The Trailer division has capacity for 22,000 trailers per year and has fixed costs of $460,000 per year. 1. Assume the Assembly division of Baxter Bicycles wants to buy 5,700 trailers per year from the Trailer division. If the Trailer 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 10,500 trailers to outside customers and has excess capacity. The Assembly division wants to buy 5,700 trailers per year from the Trailer division. What is the range of acceptable prices on transfers between divisions?

1. Transfer price per trailer
2. Transfer price per trailer will be at least		but not more than

2.

A manufacturer reports the data below.

Accounts payable	$ 10,949
Accounts receivable	19,774
Inventory	6,755
Net sales	234,907
Cost of goods sold	139,500

(1) Compute the number of days in the cash conversion cycle. (2) Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days?

Compute the number of days in the cash conversion cycle. (Use 365 days in a year. Round calculations to the nearest whole day.)

Cash conversion cycle

days

Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days?

Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days?