Forrester and Cohen is a small accounting firm managed by Joseph Cohen since the retirement in December of his partner, Brenda Forrester. Cohen and his 3 CPAS together bill 620 hours per month. When Cohen or another accountant bills more than 155 hours per month, he or she gets an additional "overtime pay of $63.20 for each of the extra hours. This is above and beyond the $4,900 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 250 hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated below. Month Jan. Feb Mar Estimate of Billable Hours 600 Feb. 500 IT 1,010 Apr 1,230 640 580 Estimate of Billable Hours 600 500 1,010 Month Jan. □ W Mar Cohen has an agreement with Forrester, his former partner, to help out during the busy tax season, up to 250 hours in any given month if needed, for an hourly fee of $135. Cohen will not even consider laying off one of his colleagues 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. (Enter your responses as whole numbers). Use regular time, then overtime, then Forrester, and then hire additional CPAs if needed. Note: For the CPA column, only include Cohen, his 3 CPAS, and any new CPAS he may hire in your total. DO NOT include Forrester. May June Reg. time CPAS billable hours M Reg. time cost $ $ $ "Overtime" hours 101 E U "Overtime" Forrester cost hours $ $ $ Forrester cost $ $ $
Forrester and Cohen is a small accounting firm managed by Joseph Cohen since the retirement in December of his partner, Brenda Forrester. Cohen and his 3 CPAS together bill 620 hours per month. When Cohen or another accountant bills more than 155 hours per month, he or she gets an additional "overtime pay of $63.20 for each of the extra hours. This is above and beyond the $4,900 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 250 hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated below. Month Jan. Feb Mar Estimate of Billable Hours 600 Feb. 500 IT 1,010 Apr 1,230 640 580 Estimate of Billable Hours 600 500 1,010 Month Jan. □ W Mar Cohen has an agreement with Forrester, his former partner, to help out during the busy tax season, up to 250 hours in any given month if needed, for an hourly fee of $135. Cohen will not even consider laying off one of his colleagues 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. (Enter your responses as whole numbers). Use regular time, then overtime, then Forrester, and then hire additional CPAs if needed. Note: For the CPA column, only include Cohen, his 3 CPAS, and any new CPAS he may hire in your total. DO NOT include Forrester. May June Reg. time CPAS billable hours M Reg. time cost $ $ $ "Overtime" hours 101 E U "Overtime" Forrester cost hours $ $ $ Forrester cost $ $ $
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Forrester and Cohen is a small accounting firm managed by Joseph Cohen since the retirement in December of his partner, Brenda Forrester. Cohen and his 3 CPAS together bill 620 hours per month. When Cohen or another accountant bills more than 155 hours
per month, he or she gets an additional "overtime" pay of $63.20 for each of the extra hours. This is above and beyond the $4,900 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 250 hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated below.
attempted
Cohen has an agreement with Forrester, his former partner, to help out during the busy tax season, up to 250 hours in any given month if needed, for an hourly fee of $135. Cohen will not even consider laying off one of his colleagues 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. (Enter your responses as whole numbers). Use regular time, then overtime, then Forrester, and then hire additional CPAS if needed.
Note: For the CPA column, only include Cohen, his 3 CPAS, and any new CPAS he may hire in your total. DO NOT include Forrester.
Month
Jan.
Feb.
Mar.
Apr.
May
June
b) Compute the cost of Cohen's plan of using overtime and Forrester.
The cost of Cohen's plan is $. (Enter your response as a whole number.)
c) Should the firm remain as is with a total of 4 CPAs?
Estimate of
Billable
Hours
600
500
1,010
1,230
640
580
Month
Jan.
Feb
Mar.
Apr.
May
June
OA. The firm should not remain as it is.
OB. The firm should remain as it is.
OC. One would have to carefully examine the other 6 months to see if hiring is merited.
Estimate of Billable Hours
600
500
1,010
1,230
640
580
Reg. time
CPAS billable hours
Reg. time
cost
$
S
S
"Overtime"
hours
"Overtime" Forrester
hours
cost
$
$
$
$
$
$
Forrester
cost
$
$
$
$
$
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