Hallstead Jewelers Case Study
Autor: gohlayyen • May 11, 2015 • Case Study • 1,409 Words (6 Pages) • 3,594 Views
[pic 1]Hallstead Jewelers
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QUESTION 1
Breakeven Points and Margin of Safety from 2003-2006
2003 | 2004 | 2006 | |
Sales | 8,583,000 | 8,102,000 | 10,711,000 |
COGS | (4,326,000) | (4,132,000) | (5,570,000) |
Gross margin | 4,257,000 | 3,970,000 | 5,141,000 |
Expenses | |||
Salaries | (2,021,000) | (2,081,000) | (3,215,000) |
Commissions | (429,000) | (405,000) | (536,000) |
Advertising | (254,000) | (250,000) | (257,000) |
Administrative expenses | (418,000) | (425,000) | (435,000) |
Rent | (420,000) | (420,000) | (840,000) |
Depreciation | (84,000) | (84,000) | (142,000) |
Miscellaneous expenses | (53,000) | (93,000) | (122,000) |
Total expenses | (3,679,000) | (3,758,000) | (5,547,000) |
Net Income | 578,000 | 212,000 | (406,000) |
Sales tickets | 5,341 | 5,316 | 6,897 |
Average sales ticket | $1,607 | $1,524 | $1,553 |
Average Variable Cost | $890 | $853 | $885 |
Contribution Margin per unit | $717 | $671 | $668 |
Total Fixed Costs | $3,250,000 | $3,353,000 | $5,011,000 |
Total Costs | $8,005,000 | $7,890,000 | $11,117,000 |
Break-even point Sales tickets | 4,535 | 5,000 | 7,505 |
Break-even Sales | $7,287,043 | $7,620,696 | $11,655,277 |
Margin of Safety | 806 | 316 | (608) |
Margin of Safety Ratio | 0.151 | 0.059 | (0.088) |
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