How much would the average sales ticket have to increase

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Reference no: EM131596187

How much would the average sales ticket have to increase to breakeven if the fixed cost remained the same in 2007 as it was in 2006?

 

What do you recommend the managers at Hallstead Jewelers do?

Exhibit 1 Hallstead Jewelers; Income Statements for Years Ended January 31 (thousands of dollars)

 

2003

2004

2006





Sales

$8,583

$8,102

$10,711

Cost of goods sold

4,326

4,132

5,570

Gross margin

$4,257

$3,970

$5,141

Expenses




Selling expense




Salaries

2,021

2,081

3,215

Commissions

429

405

536

Advertising

254

250

257

Administrative expenses

418

425

435

Rent

420

420

840

Depreciation

84

84

142

Miscellaneous expenses

53

93

122

Total expenses

$3,679

$3,758

$5,547

Net income

$578

$212

($406)

 

 

 

 

 

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

 

 

 

 

Reference no: EM131596187

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