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1. The break-even point in number of sales in 2003 was 7,012 units sold. In 2004 the break-even point was 7,727 units sold, and in 2006, the break-even point was 11,902 units sold. In respect to the break-even point in sales dollars, the break-even point for 2003 was $7,131,204. In 2004 this value was $7,456,555, and in 2006, the break-even point rose incrementally to $11,556,842. During 2003 and 2004, Hallstead resided in their previous location which held 10,230 square feet. Between these years, there is an increase in their break-even point, but this change can be associated with a down year in sales. Their sales decreased by approximately $481,000. Along with that, we can see that Hallstead’s fixed costs remained stable, only…show more content…
They have approximately 50% more space, and they need to account for the fact that with more space, they must increase their advertisement. 5. The sales ticket would have to increase by $32.81 to an average sales ticket price of $1,003.81. 6. I would recommend that the managers for Hallstead Jewelers reevaluate their cost allocation in respect to the size of their new store. Along with that, it is important for Hallstead to eliminate their commissions cost. I would recommend increasing Hallstead’s advertising costs because they are still spending the same amount on advertising as they did when they were in the old, smaller store. To start off, I would recommend to increase their advertising by the percentage increase in their new store size: 50%. Also, Hallstead’s should consider adding internet advertising to increase its market size. This may be an opportunity for cheap advertising. The sales commission is an unnecessary cost that is not practiced by Hallstead’s competitors. The managers should take away this variable cost to increase profitability. By making these changes, adding promotions and advertisement, taking away an unnecessary variable cost this would increase profitability and pull Hallstead’s out of its declining bottom

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