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Problem 19-3A (Algo) Income reporting, absorption costing, and managerial ethics LO CI Biazer Chemical produces and sells an icemelting granular used on roadwoys and sldewabs

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Problem 19-3A (Algo) Income reporting, absorption costing, and managerial ethics LO CI Biazer Chemical produces and sells an icemelting granular used on roadwoys and sldewabs in wintec. It annually produces and sells 21750 tons of its granular. Becouse of this year's mid winter, projected demand for its product is only 17,400 tons. Based oo projected production and sales of 17.400 tons, the company estimates the following income using absorption costing. Bs product cost per ton follows and consists mainly of fixed overhesd because its automated production process uses expensive tequipment. Selling onid administrative expenses consist of variable selling and administrative expenses of 36 per ton and fied seling and admininstrative expenses of $316,000 per yeoc. The company's president will not earn a bonus unloss a positive income is reperted. The controllet mentions that because the compony has large storage capaciby, it cac report a posithe income by sening producien at the controlies mentions tisat because the compony ton level even though it expects to sell only 17,400 tons. The president is surprised that the compary can report income by producing more without incieasing sales. 1. Prepare an income statoment using absorption costing based on production of 21,750 tons and sates of 17,400 thas C.m the Required: 2. By how much does inceme increase by when producing 21350 tors and storing 4350 tons in imventary compared bo only inventory? prodicing 17,400 tons? Complete this question by entering your answers in the tabs below. Required: 1. Prepare an income statement using absorption costing based on production of 21,750 tons and sales of 17,400 tons. Can the company report a positive income by increasing production to 21.750 tons and storing the 4.350 tons of excess production in inventory? 2. By how much does income increase by when producing 21,750 tons and storing 4,350 tons in inventory compared to only producing 17.400 tons? Complete this question by entering your answers in the tabs below. Prepare an income statement using absorption costing based on production of 21,750 tons and salos of 17,400 tons, Can the company repert a positive income by increasing production to 21,750 tons and storing the 4,350 tons of excess production in inventory? (Round your answers to the nearest whole doilar.) administrative expenses of $316,000 per year. The company's president will not earn a bonus unless a positive income is reported. The controlier mentions that because the company has large storage capacity, it can report a positive income by setting production at the usual 21,750 ton level even though it expects to sell only 17,400 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 21,750 tons and sales of 17,400 tons. Can the company report a positifile income by increasing production to 21,750 tons and storing the 4,350 tons of excess production in inventory? 2. By how much does income increase by when producing 21,750 tons and storing 4,350 tons in inventory compared to only producing 17,400 tons? Complete this question by entering your answers in the tabs below. By how much does income increase by when producing 21,750 tons and storing 4,350 tons in inventory compared to only producing 17,400 tons

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