Hallstead Jewelers

Harvard Business School Case #107-060

Case Software #XLS-457

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Exhibit 1 Hallstead Jewelers; Income Statements for Years Ended January 31
(thousands of dollars)
Question 2
2003 2004 2006 2003 2004

Sales 8583.00 8,102 10,711 10847.25 10287

Cost of goods sold 4,326 4,132 5,570 6074.71 5829.57
Gross margin 4257.00 3970.00 5141.00 4772.54 4457.43
Expenses
Selling expense
Salaries 2,021 2,081 3,215 2,021 2,081
Commissions 429 405 536 542.36 514.35
Advertising 254 250 257 254 250
Administrative expenses 418 425 435 418 425
Rent 420 420 840 420 420
Depreciation 84 84 142 84 84
Miscellaneous expenses 53 93 122 53 93
Total expenses $3,679 $3,758 $5,547 3792.36 3867.35
Net income $ 578 $ 212 $ (406) 980.18 590.08

Source: Casewriter
Question 1 Question 2
Total Fixed Cost 3250.00 3353 5011 3250.00 3353
Total VARIABLE Cost 4755.00 4537 6106 6617.07 6343.92
Unit contribution margin 0.7167 0.6706 0.6677 0.5640 0.5257
BEP 4534.55 4999.87 7505.07 5762.16 6377.63
No of sales at BEP 7287.03 7620.20 11655.34 8333.82 8747.56
Margin of safety 1295.97 481.80 -944.34 2513.43 1539.44
Question 2
2006 Sales space (square feet) 10,230
Sales per square foot $839
10482.75 8583.00 8,102 10,711 Sales tickets 5,341
6056.98 Average sales ticket $1,607
4425.77

3,215
524.14
257
435
840
142
122
5535.14
-1109.37

Question 2 QUESTION 3 Question 4

5011 3250 3353 5011 3450.00 3553 5211
6581.12 4,326 4,132 5,570 4755.00 4537 6106
0.5202 0.7970 0.7468 0.7454 0.7167 0.6706 0.6677
9632.51 4077.58 4489.81 6722.60 4813.60 5298.11 7804.62
13463.36 6552.68 6842.82 10440.15 7735.46 8074.73 12120.53
-2980.61 2030.32 1259.18 270.85 847.54 27.27 -1409.53
 10,230 15,280
$792 $701
5,316 6,897 7500 7500 7500
$1,524 $1,553 1446.3 1371.6 1397.7

Question 5
(5011+5570)/0.95 11137.89474
11137.89*1000/6891614.889082
Exhibit 2 Hallstead Jewelers Operating Statistics

2003 2004 2006

Sales space (square feet) 10,230 10,230 15,280

Sales per square foot $839 $792 $701
Sales tickets 5,341 5,316 6,897
Average sales ticket $1,607 $1,524 $1,553

Source: Casewriter