ES Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells 20,250 tons of its granular. Because of this year's mild winter, projected demand for its product is only 16,200 tons. Based on projected production and sales of 16,200 tons, the company estimates the following income using absorption costing. Sales (16,200 tons at $96 per ton) $ 1,555,200 Cost of goods sold (16,200 tons at $60 per ton) 972,000 Gross profit 583.200 Selling and administrative expenses 210,800 Income $ 372.400 Its product cost per ton follows and consists mainly of fixed overhead because its automated production process uses expensive equipment. Direct materials $ 13 per ton Direct labor $ 4 per ton Variable overhead $ 3 per ton Fixed overhead ($648.000/16.200 tons) $ 40 per ton Selling and administrative expenses consist of variable selling and administrative expenses of $6 per ton and xed selling and administrative expenses of $210,800 per year. The company's president will 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 20,250 ton level even though it expects to sell only 16,200 tons. The president is surprised that the company can report income by producing more without increasing sales. Required: 1. Prepare an income statement using absorption costing based on production of 20,250 tons and sales of16,200 tons. Can the company report a positive income by increasing production to 20,250 tons and storing the 4,050 tons of excess production in inventory? 2. By how much does income increase by when producing 20,250 tons and storing 4,050 tons in inventory compared to only producing 16,200 tons? ES Complete this question by entering your answers in the Required 1 Required 2 tabs below. Prepare an income statement using absorption costing based on production of 20,250 tons and sales of 16,200 tons. Can the company report a positive income by increasing production to 20,250 tons and storing the 4,050 tons of excess production in inventory? (Round your answers to the nearest whole dollar.) _ $ 1,555,200 Cost of goods sold _ Gross prot 1,555,200 Selling general and administrative expenses _ _ s 1.555200 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 By how much does income increase by when producing 20,250 tons and storing 4,050 tons in inventory compared to only producing 16,200 tons? Increase in income