Teal, Inc. Financial Reporting Analysis for 2020 Quarters
What is the projected unit sales for each quarter of 2020 for Teal, Inc.?
Quarter 1: 200,000 units
Quarter 2: 220,000 units
Quarter 3: 230,000 units
Quarter 4: 250,000 units
How can we determine the amount of net income Teal, Inc. will report in each quarter of 2020?
Calculating Net Income Using the Integral Approach
After determining the projected unit sales for each quarter, we can calculate the total variable costs, total fixed costs, and total sales revenue to find the net income. Let's break down the steps:
Integral Approach Analysis:
1. Calculate the total variable costs for each quarter:
- Variable manufacturing costs: $0.40 per unit x projected unit sales
- Variable nonmanufacturing costs: $0.40 per unit x projected unit sales
2. Calculate the total fixed costs for each quarter:
- Fixed manufacturing costs: $763,200
- Fixed nonmanufacturing costs: $1,244,800
3. Calculate the total sales revenue for each quarter:
- Sales price per unit: $4 per unit x projected unit sales
4. Calculate the net income for each quarter:
- Net income = Total sales revenue - Total variable costs - Total fixed costs
It is crucial to analyze the financial performance of Teal, Inc. for each quarter of 2020 to understand the company's profitability and efficiency in cost management. By following the integral approach, Teal can calculate the net income by integrating all the financial data for the year.
Through detailed calculations, Teal, Inc. can determine the net income for each quarter and assess its financial health. By accurately estimating variable and fixed costs, as well as projecting sales revenue, Teal can make informed decisions to optimize its profitability.
By following the steps outlined in the integral approach analysis, Teal, Inc. can streamline its financial reporting process and gain valuable insights into its performance throughout the year.