Requirements:

1- Calculate the cost per unit for type A and Type B product using traditional costing

method.

2- Calculate the cost per unit for type A and Type B product using activity- based costing

method.

3- Evaluate both methods from accuracy and usefulness perspectives.

On the other hand, Modern Motorcycle operates in highly competitive market where local and global competitors introduce their products. Some of these companies adopt cost leadership strategy, while others adopt differentiation strategy. In order to specify the optimal price, managers in Modern Motorcycle should make sure that the costing methods implemented are effective enough to accurately determine the cost per unit considering different producttypes produced by the company. Further, they should consider customers needs, market structure, and other factors affecting the pricing process. Modern Motorcycle produces two types of motorcycle; type A which is being sold at 1150 $ to individuals and type B which is being sold at 7140 $ to specific companies.

Modern Motorcycle operations and sales information are as follows:

A- The company planned to produce 100,000 type A motorcycle and 500 type B motorcycle.

B- Setup cost per batch is 150000$.

C- There should be one batch for type B motorcycle and 3 batches for type A motorcycle.

D-Welding cost for type A motorcycle is 13,545,000 $ and 1,500,000 $ for type B motorcycle.

E- Assembly cost for type A motorcycle is 10$ per unit and 70$ per unit for type B motorcycle.

F- Direct materials for each motorcycle type is 240 $ per unit.

G- Direct manufacturing labor for type A motorcycle is 400$ per unit and 3400$ per unit for type B motorcycle.

H- Single allocation rate 40% of direct labor cost.

I-The company produced and sold 100,000 units from type A motorcycle and 500 units from type B motorcycle during 2019.

Modern Motorcycle operations and sales information are as follows: A-The company planned to produce 100,000 type A motorcycle and 500 type B motorcycle. B-Setup cost per batch is 150000$. C. There should be one batch for type B motorcycle and 3 batches for type A motorcycle. D-Welding cost for type A motorcycle is 13,545,000 $ and 1,500,000 $ for type B motorcycle. E-Assembly cost for type A motorcycle is 10per unit and 70$ per unit for type B motorcycle. F-Direct materials for each motorcycle type is 240 $ per unit. G- Direct manufacturing labor for type A motorcycle is 400$ per unit and 3400$ per unit for type B motorcycle. H- Single allocation rate 40% of direct labor cost. 1-The company produced and sold 100,000 units from type A motorcycle and 500 units from type B motorcycle during 2019. Below is Modern Motorcycle company's net income during the previous ten years (2009-2018) consecutively: 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 21,000,000 24,000,000 26.000.000 28.000.000 29,000,000 30,000,000 28.000.000 32.000.000 34,000,000 37,000,000 Modern Motorcycle company's sales revenues during the same period were as follows: 2012 2009 2010 2011 2013 2014 2015 2016 2017 2018 60,000,000 70,000,000 73,000,000 80,000,000 84,000,000 90,000,000 100,000,000 105,000,000 110,000,000 114.000.000