Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter It annually produces and sells about 100 tons of its granular. In ts nine-year history, the company has never reported a net loss. However, because of this years unusually mild winter, projected demand for its product is only 65 tons. Based on its predicted production and sales of 65 tons, the company projects the following income statement (under absorption costing) Sales (65 tons at $21,080 per ton) Cost of goods sold (65 tons at $16,000 per ton) Gross margin Selling and administrative expenses Net loss $1,365,08e 1,848,80 325,000 45,158 (20,1se) ook Prinn ts product cost information follows and consists mainly of fixed cost because of its aptomated production process requiring expensive equipment Variable direct labor and material costs per ton Fixed cost per ton (5760,000+ 65 tons) Total product cost per ton 4,306 $16,000 Selling and administrative expenses consist of variable selling and administrative expenses of $310 per ton and fixed selling and administrative expenses of $325,000 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 65 tons. The president was puzzled by the suggestion that the company can report income by producing more without increasing sales Required: 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 65 tons. (Round your answers to the nearest whole dollar.) Production volume 65 tons Cost of goods sold Variable direct labor and material per ton Fixed overhead per ton 4.308 S 11 692 4.308 11.692 16.000 Cost of goods sold per unit Number of tons sold Total cost of goods sold 16,000 S SAFETY CHEMICAL Income statement Absorption method Production volume 65 tons 100 tons s volume-65 tons Sales Cost of goods sold ross margn Selling general and administrative expenses et income (loss) Under absorption costing. can a company report a higher net income amount by producing more units than they sel