Scott Wadzicki was hired in January 2020 to manage the home products division of Advanced Techno. As part of his employment contract, he was told that he would get an extra $5,000 bonus for every 1% increase by which the division's profits exceeded the previous year's profits.

Soon after coming on board, Scott met with his plant managers and explained that he wanted the plants to be run at full capacity. Previously, the plant had employed just-in-time inventory practices and had consequently produced units only as they were needed. Scott stated that, under the previous management, the company had missed out on too many sales opportunities because it did not have enough inventory on hand. Because the previous management had employed just-in-time inventory practices, when Scott came on board, there was virtually no beginning inventory. The selling price and variable cost per unit remained the same from 2019 to 2020. Additional information follows:

Net income $300,000 $525,000 Units produced 25,000 30,000 Units sold 25,000 25,000 Fixed manufacturing costs $1,350,000 $1,350,000 Fixed manufacturing costs per unit $54 $45 Calculate Scott's bonus based on the net income figures shown. I: Recalculate the 2019 and 2020 results using variable costing