Question

Forrester and Cohen is a small accounting firm, managed by Joseph Cohen since the retirement in December of his partner Brad Forrester. Cohen and his 3 CPAs can together bill 640 hours per month. When Cohen or another accountant bills more than 160 hours per month, he or she gets an additional “ overtime” pay of $ 62.50 for each of the extra hours: this is above and beyond the $ 5,000 salary each draws during the month. ( Cohen draws the same base pay as his employees.) Cohen strongly discourages any CPA from working ( billing) more than 240 hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated below:


Cohen has an agreement with Forrester, his former partner, to help out during the busy tax season, if needed, for an hourly fee of $ 125. Cohen will not even consider laying off one of his col-leagues in the case of a slow economy. He could, however, hire another CPA at the same salary, as business dictates.
a) Develop an aggregate plan for the 6- month period.
b) Compute the cost of Cohen’s plan of using overtime and Forrester.
c) Should the firm remain as is, with a total of 4CPAs?


$1.99
Sales0
Views114
Comments0
  • CreatedMarch 20, 2014
  • Files Included
Post your question
5000