Blazer Chemical produces and sells an ice-me lting granular used on roadways and sidewalks in winter. It annually produces and sells 45.300 tons ofits granular. Because ofthis year's mild Iwinter. projected demand for its. product is only 39.000 tons. Based on projected production and sales of39.000 tons. the company estimates the following income using absorption costing. Sales {39,969 tons at 511'] per ton) 5 5331,5193 Cost o-F goods sold (39,030 tons at 595 per ton} 3.1149996 Gross pro-Fit LESLIEBQ gelling and administrative expenses IIEETEIBBG Income 5 0 Its product cost per ton follows and consists mainly ofiixed overhead because its automated production process uses expensive equipment Direct materials .5 1E: per ton Direct labor 5 9 per ton Variable overhead 5 5 per ton Fined overhead [$2,5,%fi,% tons} 5 6E: per ton Selling and administrative expenses consist ofvariable selling and administrative expenses of $11 per ton and xed selling and administrative expenses of $353000 per year. The company's president Iwill not earn a bonus unless a positive income is reported. The controller mentions that because the company has large storage capacity. it can report a positive income by setting production at the usual 46.300 ton level even though it expects to sell only 39.000 tons. The president is surprised that the company can report income by producing more without increasing sales. Requlred: 1. Prepare an income statement using absorption costing based on production of45.300 tons and sales of39.000 tons. Can the company report a positive income by increasing production to 46.300 tons and storing the 1300 tons ofexoess production in inventory? 1 By how much does income increase by when producing 45.300 tons and storing 1300 tons in inventory oompared to only nrndurinn 3'?! 000 tons.\"