more than 155 hours per​ month, he or she gets an additional​ "overtime" pay of ​$65.80

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 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
​$65.80
for each of the extra​ hours: this is above and beyond the
​$5,100
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
245
hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated​ below:
 
Month
Estimate of Billable Hours
Jan.
600
Feb.
510
Mar.
1,010
Apr.
1,220
May
660
June
580
 
Cohen has an agreement with​ Forrester, his former​ partner, to help out during the busy tax​ season, up to
245
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.
Part 2
​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
Estimate of Billable Hours
CPAs
Reg. time billable hours
Reg. time cost
​"Overtime" hours
​"Overtime" cost
Forrester hours
Forrester cost
Jan.
600
enter your response here
 
enter your response here
 
​$enter your response here
 
enter your response here
 
​$enter your response here
 
enter your response here
 
​$enter your response here
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