Assessment Essays

2560 Words11 Pages
ACCT1068 Cost Management and Applications
Case Study Assignment
Barnes Scuba Diving Case
James and Rob were relaxing with some friends on the patio of James’ new apartment in Surfer’s
Paradise, Queensland, Australia.

Just that morning they had looked over their business’s profit

statement and were feeling very pleased with what they saw.

Barnes Scuba Diving (Barnes), the

business they’d started in 2000, had made profits for the last six months that exceeded their expectations. While both were pleased that their business had apparently done so well, they admitted that they didn’t really know why, because they had experienced a number of issues throughout the period1 that were expected to negatively affect profit.
“You
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Barnes Scuba Diving – Actual Results
For the six months ended 30 June, 2013 Barnes Scuba Diving earned profit that was higher than budgeted for its Scuba Diving course. Table 5 provides details of actual profit.
Table 5: Barnes Scuba Diving
Actual Profit Results
Six months ended 30 June, 2013
Sales Revenue

$756,000

Direct Materials
Certificates
Open Water Manuals
Dive Logbooks
T shirt/sweater
Direct Labour
Instructors labour
Variable Overheads
Petrol
Advertising
Indirect materials
Administration costs

$ 47,172
23,940
20,402
47,174
268,800
12,096
16,128
34,673
28,560

Total Contribution Margin
Fixed Overhead
Advertising
Rent
Insurance
Depreciation
Other

$257,055

10,000
18,000
13,000
15,000
9,000

Net Profit
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