Reference no: EM133131109

Question - Tamarisk, 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.

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

Required -

(a) Determine the amount of net income Tamarisk 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.

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