Solutions to hallstead jewelers case study

Get Access Hallstead Case Essay 1. The breakeven point in figure of gross revenues has risen along with the breakeven point in gross revenues dollars from to The border of safety has decreased every bit good. Every twelvemonth they have to increase the figure of gross revenues tickets so the old twelvemonth to run into their breakeven point.

Solutions to hallstead jewelers case study

Managerial Accounting Summary of Hallstead Jewelers Hallstead Jewelers was established in in the largest city in the tri-state region.

The stores were broken down into four departments: Sales began to stagnant in and profits began to slip as the once popular shopping designation on Lake Avenue and Second Avenue shifted two blocks west to Washington Street.

InHallstead Jewelers moved two blocks away to an old abandoned toy seller on the corner of Washington Street and Second Avenue.

Solutions to hallstead jewelers case study

Gretchen and Michaela believed after the move will be finished at the beginning of and since the move would take most of the fiscal year that it would be a "lost year". However, after the renovations they believed things would turn around.

They are several macroeconomic events that were currently in effect.

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Two rivals were growing and taking away market share. Gretchen and Michaela had several questions for the accountant to analyze to help come up with a strategy. Questions from Michaela and Gretchen How has the breakeven point in number of sales tickets number of customer orders written and breakeven in sales dollars changed fromtoand to ?

How has the margin of safety changed? What caused the changes? One idea that the consultant had was to reduce prices to bring in more customers.

With prices reduced, what would be the new breakeven point in sales tickets and sales dollars? Another idea that Gretchen had was to eliminate sales commissions. How would the elimination of sales commissions affect the breakeven volume?

How would this affect the breakeven point? Would you recommend that the sisters try this?


How much would the average sales ticket have to increase to breakeven if the fixed cost remained the same in as it was in ? What do you recommend that the managers at Hallstead Jewelers do? Responses from Accountant Question 1 The break-even point in the number of sales tickets for, and are 4, 5, and 7, respectively.

The margin of safety is the difference between the expected level of sales and break-even sales.

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Since there is no expectation of sales mentioned in the case report, we will assume a constant level of expected sales.

If the expected level of sales remains constant then as break-even sales increase the margin of safety will decrease. As we see in table 1, as fixed costs increased along with the break-even sales point, actually sales did not meet expected and the company reported a loss in This was caused by an increase in salaries larger store roomincrease in administrative expenses, increase in miscellaneous expenses, increase in depreciation increase in assets from the larger storeand an increase in rent new store ; which all lead to an increase in fixed costs and an increase in break-even sales.

See calculations in Table 1. Break-even Sales Calculations thousands of dollars Feb 18,  · Hallstead Jewelers case study by William J. Bruns Jr. Harvard Business Review Case Study. Simons, get tutoring of this case. CONTACT US FOR TUTORING AND MENTORING: Send you initial inquiry by submitting the following form.

Our representative will respond you as soon as possible. Case study solutions by top business students. Hallstead Jewelers A retail jewelry salesman has moved to some bigger store and it is . Hallstead Jewelers Harvard Case Study Solution and Analysis of Case Study Solution & AnalysisIn most courses studied at Harvard Business schools, students are provided with a case study.

Solutions to hallstead jewelers case study

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Hallstead Jewelers Case Study Total Fixed Costs In Thousands 3, 3, 4, Sales In Thousands 8, 8, 10, Total Variable Cost In.

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