Determine the cost of a plan which uses only overtime

Assignment Help Operation Management

Reference no: EM13897201

Fitch and Hughes, P.C.

Fitch and Hughes, P.C., is a small law firm specializing in family law, wills, estates, and trusts. The firm, begun in 1980 by Jason Fitch and George Hughes, currently has three attorneys who are shareholders, and three associate attorneys. The firm is managed by George Hughes since the retirement of his cofounder of the firm, Jason Fitch. In early December, Hughes was thinking about the firm's workload for the first half of next year.

Given the current client load and projections for the next six months, Hughes estimated the number of billable hours for the firm is as follows:

Month	Hours
Jan.	1,100
Feb.	1,150
Mar.	1,450
Apr.	1,450
May	1,250
June	1,200

The three attorneys who are shareholders each receive a monthly salary of $10,500, while the associate attorneys are paid $7,000 each month. The three shareholders, of course, also receive additional compensation at the end of each year when the firm's profits are distributed to them based on their proportionate shareholdings.

Under normal circumstances, each of the six attorneys can bill a total of 175 hours per month. When any attorney bills more than 175 hours, he or she receives additional compensation of $80 per hour for associate attorneys or 120 per hour for the shareholders. The four sharehold- ers have agreed that no attorney can bill more than 225 hours per month. In the interest of fairness, they also have decided that any "overtime" work required would be divided equally among all attorneys. This arrangement would allow each attorney the opportunity to increase income while preventing a few from benefiting excessively over the others.

While Jason Fitch does not really want to work any longer, he has agreed that he would be willing to help out in extreme situations at a rate of $150 per hour, as long as he is guaranteed a minimum of 30 hours during any single month. The firm could, of course, hire an additional associ- ate attorney at the same salary as the current associates. If an additional attorney is hired, Hughes wants to do so by the beginning of the year so that the new attorney is familiarized with the firm as soon as possible. He is strongly opposed to letting any attorney go during the six-month period.

Questions

1. Determine the cost of a plan which uses only overtime and the services of Jason Fitch.

2. Suppose clients pay the same hourly rate regardless of which attorney bills the hours, and Hughes is interested in determining the lowest-cost plan for the firm. What should Hughes do, given the current policies of the firm?

3. What other considerations might influence the plan that Hughes develops?

Reference no: EM13897201

Questions Cloud

Why do you think that the homeschool movement is growing : Why do you think that the homeschool movement is growing so rapidly? Should parents who choose to homeschool (or send their children to private school) have to pay taxes toward public education

What are the purposes of education? : What are the purposes of education?

Why are spare parts considered to be independent demand : Why are spare parts and service parts considered to be independent demand, not dependent demand? Why is collaboration within an organization and the supply chain important when using DRP and MRP?

How ecologic analysis is used to study health effects of air : Explain how ecologic analysis is used to study the health effects of air pollution. Provide examples of uncontrolled factors that may affect ecologic study results

Determine the cost of a plan which uses only overtime : Determine the cost of a plan which uses only overtime and the services of Jason Fitch. Suppose clients pay the same hourly rate regardless of which attorney bills the hours

Express the balance sheets in common size percents : Express the balance sheets in common size percents. Round amounts to the nearest one tenth of a percent.

What are some examples of environmental sources of exposure : What are some examples of environmental sources of exposure of populations to toxic heavy metals? What factors can exacerbate the effects of toxic exposures on populations with low socioeconomic status?

To what extent does the given system help : Describe the current system in use as it applies to the operations personnel and marketing personnel. To what extent does this system help or hinder Med-Chem's ability to achieve its objectives? Why?

What types of injury of public health concern are associated : What types of injury of public health concern are associated with exposure to each of the different forms of radiation? How does the risk of each injury vary with the dose of the radiation in question?

User Account

All Pages