Reference no: EM133166793

Question - Blue, Inc. is a company that manufactures and sells a single product. Unit sales for each of the four quarters of 2020 are projected as follows.

Quarter	Units
First	96,000
Second	180,000
Third	660,000
Fourth	144,000
Annual total	1,080,000

Blue incurs variable manufacturing costs of $0.40 per unit and variable nonmanufacturing costs of $0.35 per unit. Blue will incur fixed manufacturing costs of $864,000 and fixed nonmanufacturing costs of $1,296,000. Blue will sell its product for $4 per unit.

Required -

Determine the amount of net income Blue will report in each of the four quarters of 2020, assuming actual sales are as projected and employing the integral approach to interim financial reporting. (Ignore income taxes.) Repeat the analysis under the discrete approach.

Compute Blue's profit margin on sales for each of the four quarters of 2020 under both the integral and discrete approaches.