Hallstead Jewelers

Hallstead Jewelers Case Study
| 2003| 2004| 2006|
integrality Fixed Costs ($)(In Thousands)| 3,177| 3,240| 4,799|
gross revenue ($)(In Thousands)| 8,583| 8,102| 10,711|
Total Variable Cost ($)(In Thousands)| 4,808| 4,630| 6,228|
Number of Sales tickets| 10,153 | 9,967| 13,063|
Sales revenue enhancement Per Unit ($)| 845.37| 812.88| 819.95|
Variable Cost Per Unit ($)| 473.56| 464.53| 476.77|
Contribution circumference ($)(In Thousands)| 3,775| 3,472| 4,483|
Contribution Margin Per Unit ($)| 371.81| 348.35| 343.18|
Break Even manoeuver in # of Units | 8,544| 9,301| 13,984|
Break Even Point in Sales Dollars ($)| 7,222,841| 7,560,597| 11,466,180|
Margin of Safety (%)| 15.9%| 6.7%| -7%|

1) Over the three years that we break down in the case, the Break Even Point in gross gross revenue dollars increases. This jakes be expected as production and expenses increase, even it is important to note the large jump in 2006. Granted, this is after(prenominal) two years during an expansion. The margin of safety has falld. This measures the risk of investiture in a troupe. In other words, the decline in margin of safety shows that the difference between sales sin little and sales needed to break even standting smaller.



These changes can be attributed to their total sales amounting to a value less than the breakeven point in sales.

2) If average prices were reduced 10%, and sales tickets were increased to 14,000 the income of the company would increase. However, even with this change in values, the company is still under its breakeven point. The new breakeven point, with a 10% decrease in average prices and an increase in units sold to 14000, would be equal to 14,945 units and $10,297,105.

3) Gretchens idea to eliminate sales commissions, morally, whitethorn not be the correct decision because it works in a way to motivate the sales people. Without this commission, in the farsighted run sales could decrease because sales people experience a lesser sense of loyalty to the company. In...If you want to get a full essay, order it on our website: Ordercustompaper.com



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