Product details

The global bicycle market is expected to grow significantly over the next decade. Torpedo Bikes is a small company specialised in road bikes and mountain bikes that offer good quality bicycles at reasonable prices. The company is contemplating some strategic changes to meet customers’ demands. Despite its remarkable success in the past, Torpedo Bikes management is concerned about new competition, profitability issues, and new opportunities for business expansion. This case illustrates a number of challenges encountered by the company to manage cost control and decision-making issues, particularly the allocation of overhead costs using traditional and Activity-Based Costing (ABC) methods.