Act I THE FABLE OF THE WANDERING BEARDED PRESIDENT Once upon a time, a very capital-intensive company was operating at a loss. Although its plant and equipment had a capacity of 300,000 thingies, it was producing and selling only 100,000 thingies per year and its operating figures appeared as follows: Required: Complete both full absorption and contribution margin income statements. Act II Then one day a Wandering Bearded President came to the Board of Directors and said, "Make me president, pay me half of any operating income I produce and I'll make this company profitable." "DONE," the Board of Directors said. So the Bearded President set the factory running at full capacity making 300,000 thingies per year. (Note: While the production increased to 300,000 thingies, the company could not sell the additional product made. Instead the excess production was stored in a warehouse the company owned.) At the end of the year, the Bearded President prepared a full absorption income statement (using the figures above) and said, "Pay Me!" The Board of Directors screamed, "We're going broke!" "Oh," said the Bearded President. "Look at the income statement yourself. You have never been more profitable." You have been called to pull the company from the brink of disaster and explain the problem. What do you concluded