Barnes Scuba Diving Case

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Evaluation of revenue performance Barnes Scuba Diving generated higher revenue than budgeted for the six months ended on 30 June, 2015 of $126,000 with the sales-volume variance of $28,512F which indicates the difference of actual and expected quantity units sold multiplied by the budgeted price per unit. This is the result of an increasing in the actual course undertaken of 336 courses comparing with 300 courses budgeted. The budgeted number of volume-sold is determined by both of sales and marketing manager which is based on the estimation of company market share, features, price points, etc. The reasons for favourable sales volume are caused by the managers underestimating the ability of the product or the demand for scuba diving increases more than what they expected. Barnes is operated in Queensland which has the most famous diving destination- Great Barrier Reef while there is a season for diving with white sharks and the searching food venture of seals from January to June which could increase the demand significantly…show more content…
Besides, the selling rice variance is also favourable to $50,400 which suggests that actually one course of scuba diving is sold at $375, $25 higher than budgeted price. This variance also is controlled by sales and marketing managers of Barnes Scuba Diving and there are some possible reasons for favourable variance other than increasing price such as market prices increase and less competition. Increasing in both sale volume and price are the main reasons for higher revenue comparing to budgeted revenue, however, this does not indicate that Barnes Scuba Diving generates higher profit for the first six months. The costs to produce and operate the company also need to evaluate because in some cases higher revenue is not equivalent to higher profit because the difference of cost may outweigh the difference of

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