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Hallstead Jewellers
Hallstead Jewellers
Hallstead Jewellers
2003
2004
2006
Years
COGS
Commisions
4,326,000
429,000
4,132,000
405,000
5,570,000
536,000
Total
4,755,000
4,537,000
6,106,000
Sales
Variable cost (-)
Contribution
Fixed costs (-)
Net
Fixed Cost
2003
2004
2006
Salaries
Advertisments
Adm. Expenses
Rent
Depreciation
Misc Expenses
2,021,000
254,000
418,000
420,000
84,000
53,000
2,081,000
250,000
425,000
420,000
84,000
93,000
3,215,000
257,000
435,000
840,000
142,000
122,000
Total
3,250,000
3,353,000
5,011,000
Margin of safety
(=) Sales - Break even sales
Years
No. of sale tickets
2006
7,500
8,161
1,398
11,406,962
Sales commision = 0
So, Variable Cost = COGS
Years
Sales
Variable cost (-)
Contribution
Fixed costs (-)
Net
2006
10,711,000
5,570,000
5,141,000
5,011,000
130,000
Years
No. of sale tickets
2006
6,897
6,723
1,553
10,440,192
200,000
2006
Salaries
Advertisments
Adm. Expenses
Rent
Depreciation
Misc Expenses
3,215,000
457,000
435,000
840,000
142,000
122,000
Total
5,211,000
Years
2006
Sales
Variable cost (-)
Contribution
Fixed costs (-)
Net Income
10,711,000
6,106,000
4,605,000
5,211,000
-606,000
Years
No. of sale tickets
2006
6,897
7,805
1,553
12,120,572
2006
10,711,000
5,570,000
5,141,000
Expenses
Commissions
Salaries
Advertising
Admin Expense
Rent
Depreciation
Misc. Expenses
536,000
3,215,000
257,000
435,000
840,000
142,000
122,000
Total
5,547,000
2007
Net Income
(Gross Margin - Total Expenses)
Fixed Cost
5,011,000
0.667682
CM ratio
Break Even Point (sales ticket)
( total fixed cost/unit contribution margin)
Break Even Point (in dollars)
(fixed cost/CM ratio)
New Avg. Sales ticket
Old Avg. Sales ticket
Percent increase in avg. sales of ticket to break even
-406,000
0.4299
7505
11655
1690
1553
8.8134
2003
2004
2006
8,583,000
4,755,000
3,828,000
3,250,000
8,102,000
4,537,000
3,565,000
3,353,000
10,711,000
6,106,000
4,605,000
5,011,000
578,000
212,000
-406,000
5,341
5,316
6,897
4,535
5,000
7,505
1,607
1,524
1,553
7,287,019
7,619,807
11,655,380
1,295,981
482,193
-944,380