Case #1 Hallstead Jewelers Answers 1. We see an increase in the break-even point‚ both in dollars and in sales tickets‚ from year 2003 to 2006. This increase is not as dramatic between the years 2003 and 2004 as it is between 2004 and 2006. The increase in break-even point in sales tickets is 1615‚80 and 7623‚90 respectively. The increase in the first year is due to the increase in fixed costs and also the decrease in sales. The increase between 2004-2006 is due to the dramatic increase
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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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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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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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Managerial Accounting – Question 1 Break even point in number of sales tickets 2003 2004 average sales tickets variable cost fixed cost sales tickets to break even 1607 725 2954 3349 1524 768 2990 3955 2006 1553 814 3893 5267 Question 2 If average prices were reduced 10% and unit sales increased to 7‚500‚ would the company’s income be increased? 2006 Avg. Sales Ticket Unit Sales Revenue COGS Fixed expenses $1553 6897 $10‚711‚041 $5‚570‚000 $5‚547‚000 2007 $1398 7500 $10‚485‚000 $6‚054
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Except COGS and Commission which are variable costs‚ all others are fixed costs. All in thousands of dollars (except sales tickets) 2003 2004 2006 Variable Cost (VC) 4755 4537 6106 Fixed Cost (FC) 3250 3353 5011 Average sales ticket price 1.607 1.524 1.553 Sales tickets (in nos.) 5‚341 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
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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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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 Jewelers (Case Study1) Accounting 2301 Managerial Accounting Professor May Spring 2013 By: Madhur Mittal‚ Ishaq Rehman‚ Ying Wang and Bohan Li Question 1 Breakeven is a point at which a company covers all its costs and its profit is zero. After reviewing Hallstead Jewelers Income Statement‚ operational statistics‚ and table 2 and 3‚ for fiscal years 2003‚ 2004‚ and 2006‚ we can see a slight change in the breakeven unit and dollar amounts between the fiscal year
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INTRODUCTION: Hallstead Jewelers is a family owned company that has been around for generations. After the death of their father Gretchen and Michaela resumed ownership of a business that had been very successful for many years. However‚ due to changes in the market related to competition‚ customer demand‚ and demographics‚ business has not been as profitable as the sisters hoped it would be upon taking over of (remove) the company. Michaela and Gretchen are now faced with the tough task of revitalizing
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