An accounting firm has 20 accountants and two staff support personnel. The firm

Question

An accounting firm has 20 accountants and two staff support personnel. The firm has trouble handling all of its workload, especially around tax time each year, because the accountants currently have more work than they can accomplish. The president of the firm has studied the work content of the various jobs done by the firm and has determined that 37% of job activities performed by the accountants are routine work that could be done by support staff. The reason the accountants perform this routine work is because the two staff support people are already overloaded. Assume a 40-hour workweek. Formulas: w=WL/AT Determine:

a) How many more staff personnel the firm should hire

b) By what percentage could the firm’s revenues be increased by freeing the accountants of the routine work (1 point)

Explanation / Answer

a)

Routine work done by accountant = 37%

There are 20 accountants who are occupied in 37% routine work

So, in terms of number of accountants occupied in routine work = 37%*20 = 7.4 person

This work can be performed by staff personnel.

Hence, firm should hire 8 more staff personnel

b)

Basis above calculation, the number of accountants handling the core work = 20 - 7.4 = 12.6 accountants.

If 8 staff personnel are hired for routine work, all 20 accountants can do the work

So, % increase = (Number of accountants in new scenario/Number of accountants in old scenario - 1)*100% = (20/12.6-1)*100% = 7.4/12.6*100% = 58.7%

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