Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sels about 100 tons of ts granular. In its nine-year history, the company has never reported a net loss. However, because of this year's unusualy mild winter, projected demand for its product s only 60 tons. Based on its predicted production and sales of 60 tons, the company projects the following income statement (under abeorption costing) Sales (60 tons at $21,000 per ton) Cost of goods sold (60 tons at $16,000 per ton) Gross margin Seling and administrative expenses Net loss $1,260,000 960,000 300,000 318,600 S (18,600) Its product cost information follows and consists mainly of foxed cost because of its automated production process requiring expensive equipment Variable direct labor and material costs per ton Foxed cost per ton ($750,000 60 tons) Total product cost per ton 3,500 12,500 $16,000 Selling and administrative expenses consist of variable selling and administrative expenses of $310 per ton and fixed selling and administrative expenses of $300,000 per year The company's president is concerned about the adverse reaction from its creditors and shareholders if the projected net loss is reported The operations manager mentions that since the company has large storage capacity, it can report a net income by keeping its production at the usual 100-ton level even though it expects to sell only 60 tons The was puzzled by the suggestion that the company can report income by producing more without increasing sales uired: 1. Can the company report a net income by increasing production to 100 tons and storing the excess production in inventory? Complete the following income statement (using absorption costing) based on production of 100 tons and sales of 60 tons 100 tons of goods sold: xed overhead per ton 60 tons Cost of goods sold per uni Number of tons sold Total cost of goods sold SAFETY CHEMICAL Income statement Absorption method Production volume 60 tons 100 tons Sales volume-60 tons ost of goods sold ross margin Net income (loss Under absorption costing, can a company report a higher net ncome amount by producing more unids than they sel