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1. How has the breakeven point in number of sales tickets (number of customer orders written) and break-even sales in dollars changed from 2003, to 2004, and to 2006? How has the margin of safety changed? What caused the changes?

2. One idea that the consultant had was to reduce prices to bring in more customers. If average prices were reduced ten percent (10%), and the number of sales tickets (unit sales) increased to 7,500, would the company's income be increased? With prices reduced, what would be the new break-even point in sales tickets and sales dollars? (answer 2 pls)rices reduced, what would be the new break-even point in sales tickets and sales dollars?

Exhibit 2 Hallstead Jewelers Operating Statistics 2003 2004 2006 Sales space (square feet) Sales per square foot Sales tickets Average sales ticket 10,230 $ 839 5,341 $ 1,607 10,230 $ 792 5,316 $ 1,524 15,280 $ 701 6,897 $1,553 Source: Casewriter Exhibit 1 Hallstead Jewelers; Income Statements for Years Ended January 31 (thousands of dollars) 2003 2004 2006 $8,583 |4,326 $4,257 $8,102 4,132 $3,970 $10,711 5,570 $ 5,141 Sales Cost of goods sold Gross margin Expenses Selling expense Salaries Commissions Advertising Administrative expenses Rent Depreciation Miscellaneous expenses Total expenses Net income 2,021 429 254 418 420 2,081 405 250 425 420 3,215 536 257 435 840 142 84 84 53 93 122 $3,679 $ 578 $3,758 $ 212 $ 5,547 $ (406) Source: Casewriter Exhibit 2 Hallstead Jewelers Operating Statistics 2003 2004 2006

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