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 three 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 $5000 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 six months is estimated below:

Month Estimate of billable hours

Jan 600

Feb 500

Mar 1000

Apr 1200

May 650

June 590

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 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 six-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 four CPAs?