Please read the following case.

James Peterson was hired during January $2020$ to manage the lawn products division of Tech$-$Grow Products. As part of his employment contract, he was told that he would get $$5,000$ of additional bonus for every $1\%$ increase that the division's profits exceeded those of the previous year.

Soon after being hired, James met with the plan managers and explained that he wanted the plants to be run at full capacity. Previously, the plan had employed JIT inventory practices and produced units only when needed. James said that the company was missing out on too many sales opportunities because it didn't have enough inventory on hand.

Because previous management used JIT Inventory Practices, there was virtually no inventory on hand when James was hired. The selling price and variable costs per unit remained the same from $2019$ to $2020.$

$2019,{2020}_{?}$

Net Income

$300,000,525,000$

Units Produced

$25,000,30,000$

Units Sold

$25,000,25,000$

Fixed MOH Costs

$1,350,000,1,350,000$

Fixed MOH Costs per unit

$5445$

A$)$ Calculate James' bonus based on net income from above.

B$)$ Re$-$compute the $2019$ and $2020$ results using variable costing.

C$)$ Re$-$compute James' $2020$ bonus under variable costing.

D$)$ Were James' actions ethical? Should any action be taken by the company? What would you suggest?