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    Museum Jewelry Case Study Assignment

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    RalphBomhas
    A case study for Museum

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    Museum Jewelry Case Study Assignment

    Uploaded by

    RalphBomhas
    355 views3 pages
    A case study for Museum

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    © © All Rights Reserved

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    A case study for Museum

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    355 views3 pages

    Museum Jewelry Case Study Assignment

    Uploaded by

    RalphBomhas
    A case study for Museum

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Museum Jewelry Case Study

    (Case by Les Livingstone, copied with permission)


    Jane Goodheart established and ran a small workshop that manufactured
    costume jewelry productions of well-known jewelry masterpieces by Faberge
    and other famous designers, plus antique pieces of Etruscan, Russian,
    Egyptian, Chinese and French jewelry. She marketed these creations to
    museums across the United States in batches of 12 assorted items, for which
    she charged $680 per batch. In turn, the museums sold the jewelry at prices
    averaging nine times what they paid for the jewelry.
    Jane's only assistant was Joe, who was paid $15 per hour for his unskilled
    labor. Jewelry production varied between a low of 4 and a high of 6 batches
    per week, and averaged 200 batches per year. Each batch cost $80
    (excluding wages) to pack and ship, with Joe doing all the packing and
    shipping. It takes Joe 2 hours to pack and ship one batch. Joe also does other
    chores, such as sweeping, vacuuming and cleaning, and he averages 20
    hours per week of employment with Jane's workshop, for the 40 weeks per
    year that he works for Jane (with his time split between packing and shipping
    of batches and doing weekly cleaning, etc.)
    Jane spends 10 weeks a year touring the U.S. and attending trade shows in
    order to sell her jewelry, and to find suppliers of semi-precious stones, beads,
    and other components for her products. Her travel, hotel and food costs were
    $6,050 each year. Workshop rent and utilities cost her an average of $300
    per week.
    Jane works 40 weeks a year at making jewelry, and sublets the workshop for
    its cost in rent and utilities during her 10-week tour plus her 2 weeks of
    vacation each year.
    The cost of rent, utilities and raw materials varied from $2,300 per week
    when 4 batches were produced, to $2,800 per week in weeks when 5
    batches were produced, and $3,300 per week when 6 batches per week were
    manufactured.
    Business was brisk, and Jane could easily sell every batch that she produced.
    But she found herself earning very little money, and after paying her 28%
    income tax, she found herself with almost no money to live on. That led Jane
    to you, as her consultant. She complained to you that she worked very hard,
    50 weeks a year, but ended up broke and frustrated. Jane said that her

    tastes were modest, and emphasized artistry rather than material


    possessions. She noted that she would be quite satisfied to make $25,000 a
    year, after taxes.

    You agreed to analyze her business operations and to advise her how to
    reach her modest goal of earning $25,000 per year, after taxes.
    After some calculation and some thought, you conclude that Jane has to
    increase her revenues, perhaps by achieving greater volume, or perhaps by
    raising her selling price. Write a short report directed to Jane Goodheart with
    your recommendation on how to increase revenue, supported with a proforma contribution income statement which incorporates your
    recommendations. You should show all calculations in a Microsoft Excel
    document, include a Cost-Volume-Profit chart that is well labeled, and
    provide your conclusion. (The report to Ms. Goodheart can be written in a
    Textbox (Textboxes automatically wrap text) in a separate worksheet in the
    same Excel document. The report should be appropriate for your
    client, Jane, Goodheart, the artist and sole proprietor.
    Submit one document that contains your calculations, CVP graph,
    and the report. Be sure to proofread. A PowerPoint presentation
    Museum Jewelry Hints has been posted in this weeks module to
    get you started.

    Copyright 2009 by Les Livingstone.


    Thanks to my faculty colleagues, Jay Holmen, Mark Turner and Laura Tindall
    for their helpful suggestions for improving this case.

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