Reference no: EM133066427

Question - Sheridan, 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	100,800
Second	189,000
Third	693,000
Fourth	151,200
Annual total	1,134,000

Sheridan incurs variable manufacturing costs of $0.40 per unit and variable nonmanufacturing costs of $0.35 per unit. Sheridan will incur fixed manufacturing costs of $907,200 and fixed nonmanufacturing costs of $1,360,800. Sheridan will sell its product for $4 per unit.

Required -

Determine the amount of net income Sheridan 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 Sheridan's profit margin on sales for each of the four quarters of 2020 under both the integral and discrete approaches.