GIBIIIIIIIMIW [XI-lm 'i"|H|M|III|lI|| C3|6|E|G||+ o i, { 9 C," H eztomheducation.comfextfmapndex.htm|?_oon=conScexternalJJrowser=0&|aunchUrl=https%253A%252... 1': Fa 3 Ch 5 HM: ACGBDTB 0 Saved Help Save a an Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. it does not indicate completion. Return to question 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 its nine-year history. the company has never reported a net loss. However, because of this year's unusually mild winter, projected demand for its product is only 60 tons. Based on its predicted production and sales of 60 14 12 tons. the company projects the following income statement (under absorption costing}. points Sales (60 tons at $20,000 per ton) $1,200,000 Cost of goods sold [60 tone at $15,000 per ton] 900,000 Gross margin 300,000 Selling and administrative expenses 319,300 Net loss 5 (19:30\") Its product cost information follows and consists mainly of xed cost because of its automated production process requiring expensive equipment. Variable direct labor and material costs per tan 5 2,333 Fixed cost per ton ($760,000 + 60 tons] 12,66? Total product cost per ton $15,000 Selling and administrative expenses consist of variable selling and administrative expenses of $330 per ton and xed 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 president is puzzled by the suggestion that the company can re port income by producing more without Mc C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252... > S CA Ch 6 HW - ACG3073 i Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 14 Selling and administrative expenses consist of variable selling and administrative expenses of $330 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 12 large storage capacity, it can report a net income by keeping its production at the usual 100-ton level even though it expects to points sell only 60 tons. The president is 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 60 tons. (Round your answers to the nearest whole dollar.) x Answer is not complete. Production volume Cost of goods sold: 60 tons 100 tons Variable direct labor and material per ton 2,333 Fixed overhead per ton Cost of goods sold per unit $ 2,333 Number of tons sold Total cost of goods sold Mc Graw M Bb (XM Bb M UCSC M iF + C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252... > S CA Ch 6 HW - ACG3073 i Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 14 X Answer is not complete. Production volume Cost of goods sold: 60 tons 100 tons 12 Variable direct labor and material per ton 2,333 points Fixed overhead per ton Cost of goods sold per unit $ 2,333 Number of tons sold Total cost of goods sold BLAZER CHEMICAL Income statement - Absorption method Production volume Sales volume - 60 tons 60 tons 100 tons Sales $ 1,200,000 $ 2,000,000 X Cost of goods sold Gross margin 1,200,000 2,000,000 Selling general and administrative expenses Net income (loss) $ 1,200,000 $ 2,000,000 Mc Graw