Daddy would know what to do, but I don't.
Located in the largest city in the tri-state area, the company has remained a family business since its inception. Up untilthe company had operated in the same location without the need to expand or relocate due to its superb reputation and loyal customer base.
However, Hallstead Jewelers reached a point during that year when profits began to decrease and sales became stagnant. After a few years of this trend it became obvious to the owners that relocation was necessary.
So in the owners, Gretchen Reeves and Michaela Hurd made the decision to relocate to a larger building in an effort to expand and grow the business. Since the new facility was only two block away from the original location, it was anticipated that there would be no loss of their loyal customer base.
The owners also made the decision to expand the product line in hopes of increasing sales.
However, the company faced stiff competition from large retailers such as Tiffany and Company and the internet business, Blue Nile. Unfortunately, the relocation did not produce the results that Gretchen and Michaela expected. An analysis was conducted to identify operating issues and to determine a course of action that would improve revenue and business profitability.
Appendices C, D and E detail the impact upon company profitability based upon various levels of ticket sales during these same periods. The average ticket price fluctuated over these periods. An analysis of this information identified the following issues.
We can see a decline in the Margin of Safety and inthe company began incurring losses. The company also has increased its operating fixed cost in rent, salaries, commissions and other miscellaneous expenses causing the breakeven point to rise and the margin of safety to decline See Appendix B.
One approach considered to increase business profitability is to reduce sales price.
Appendix F provides a detailed analysis of how profit would be impacted by the price reduction. This represents an increase of an additional items that must be sold at the reduced price to reach the break even point.
However, Gretchen has the idea of eliminating sales commission. This could possibly affect the growth of Hallstead Jewelers in a good way. An increase in advertising also increases total expenses and causes net income to decrease even more.
If sales continue to drop for Hallstead Jewelers, it would not be wise for Gretchen and Michaela to increase advertising. An analysis of increasing advertising is provided in Appendix H. Appendix I provides a detailed analysis of how this figure was obtained.Check out our top Free Essays on Hallstead Jewelers Case Study to help you write your own Essay.
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Hallstead Jewelers Question 3 Question 4 Question 2 Question 5 Family-owned business, established in Sold fine jewelry, gems, watches, tabletops and artistic gifts. Only Store in the city to provide sales commissions. The profits of the company started to declined . View Notes - Hallstead Jewelers Case from BUS at Florida Institute of Technology. Hallstead Jewelers Exhibit 1 Hallstead Jewelers; Income Statements for Years Ended January 31 (thousands of Find Study Resources93%(69). Hallstead Jewelers Case Study Essay example Submitted by Yellow Team Eunice King Ronda Klassen Joshua Krupnick Larry McCraw Ronald Mills BUS Managerial Accounting Professor Nancy Shoemake April 18, Summary Hallstead Jewelers was one of the largest jewelry and gift stores in the United States for 83 years.
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Maj. Joseph Curt Cornelison 1st Infantry Division Command Sergeant Major SECTION III 8IN-PROCESSING.. 8 Col. Andrew Cole Jr. SECTION IV 10THE CENTRAL . ABOUT THE CASE Hallstead Jewelers was one of the largest jewellery and gift stores in the United States for 83 years.
Customers came from throughout the region to buy from extensive collections in each department. Free College Essay Hobby Loss Case. Taxation Presentation Background Mr. Crane is a respected professor of theater and also write plays.
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Hallstead Jewelers Case Study Class: Managerial Accounting Instructor: Robert O’Haver 1. The break even point in units and sales have increased form to to due to the greater increase in fixed costs especially from expanding the business as well as insufficient average sales and unit sales to compensate these changes.