5‚316 6‚897 Variable Cost per sales ticket 0.9 0.9 0.9 Breakeven Qty 4‚535 5‚001 7‚506 Breakeven Sales = Breakeven Qty x average sales ticket price Breakeven Sales 7‚287 7‚621 11‚655 Margin of Safety = Sales in excess of the breakeven sales Sales 8‚583 8‚102 10‚711 Margin of Safety (sales dollar) 1‚296 481 (944) Margin of Safety (sales tickets) 806 315 (609) The major cause of the increase in breakeven quantities and sales‚ and the decrease of margin of safety is the
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Total Fixed Cost $3‚250 $3‚353 $5‚011 Breakeven point in number of sales tickets Breakeven Point = Total Fixed Cost / (Contribution Margin/ Units) 2003 = $3250 / ($3828/5341) = 4535 2004 = $3353 / ($3565/5316) = 5000 2006 = $5011 / ($4605/6897) = 7505 Breakeven point in sales dollars 2003 = breakeven point in units* price per unit = 4535*$1607=$7287745 2004 = 5000*$1524=$7620000 2006 = 7505*$1553=$11655265 Margin of safety in % 2003 = (Budgeted Sales - Breakeven Point in Dollars)/ Budgeted Sales =
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Hallstead Jewelers Managerial Accounting ACCT 2301 – Case Analysis 1 September 29‚ 2010 Melissa Ng Variable costs are made up of cost of goods sold plus sales commissions. Fixed costs are made up of salaries‚ advertising‚ administrative expenses‚ rent‚ depreciation‚ and miscellaneous expenses. Assuming all questions are answered independently: 1. Income statement using the contribution approach: | 2004 | 2005 | 2007 | Sales | $8‚583‚000 | $8‚102‚000 | $10‚711‚000 | Less:
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1.0 ABOUT THE CASE Hallstead Jewelers was one of the largest jewellery and gift stores in the United States for 83 years. Customers came from throughout the region to buy from extensive collections in each department. Any gift from Hallstead’s had an extra cache attached to it as they were known for having the best. Even though the principal retail shopping areas shifted two blocks west‚ Hallstead’s reputation and selection still brought in customers. In 1999 however‚ sales became stagnate and
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Hallstead Jewelers Case Study Class: Managerial Accounting Instructor: Robert O’Haver 1. The break even point in units and sales have increased form 2003 to 2004 to 2006 due to the greater increase in fixed costs especially from expanding the business as well as insufficient average sales and unit sales to compensate these changes. The margin of safety has decreased over the years due to the increase in expenses and the lack of gross profit to compensate
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Background description Hallstead Jewelers is a large retailer specializing in jewelry and gift. It was started up as a family business and has gained reputation through their 83 years history. Hallstead provides customers with extensive collections of products‚ including jewelry‚ gems‚ watches‚ tabletop and artistic gifts‚ by its four sales departments. However‚ the market place of Hallstead was challenged as the emergence of nearby modernized shopping center which has impacted customers’ consumption
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BREAK EVEN ANALYSIS Break-even is the point at which a product or service stops costing money to produce and sell‚ and starts generating a profit for your business. This means sales have reached sufficient volume to cover the variable and fixed costs of producing and distributing your product. [Type the document subtitle] KOMAL BHILARE ROLL NO: 85 2013 DEFINITION Break Even is: •the sales point at which the Company neither makes profit nor suffers loss‚ or •sales level where fixed
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Description In 2002‚ Gretchen Reeves and Michaela Hurd sisters took over the management of Hallstead Jewelers‚ which was established 83 years earlier by their grandfather and has become one of the largest jewelry and gift stores in the United States for its product diversity strategy‚ comprehensive range of commodities and brand name recognition among the same industries and customers. After sales became stagnant and profits started to slip since 1999‚ the sisters decided to change the location
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Hallstead Case 1.) The breakeven point in number of sales has risen along with the breakeven point in sales dollars from 2003 to 2006. The margin of safety has decreased as well. Every year they have to increase the number of sales tickets then the previous year to meet their breakeven point. After 2004 when expansion of the store begun‚ Hallstead’s fixed cost have grown each year. The decrease from 2004 to 2006 is far less substantial than from 2003 to 2004. This damage is cause by the stores
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A breakeven analysis is used to determine how much sales your business needs to start making a profit. Every business wants and needs to make a profit but the only way you can determine if your product or service is profitable is by conducting a break-even analysis. This is a tool used by companies to understand how many products they have to sell in order for the company to break even. However‚ for you to understand how to come up with the breakeven analysis‚ you first need to understand the process
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