Eastern Pacific Lumber $($EPL$)$ is a private forestry company located on Vancouver Island in British Columbia. The company uses a bonus plan to reward its management staff according to their areas of responsibility. For example, the chief operating officer receives a bonus of $1\%$ of net income, the sales manager receives $0\mathrm{.}1\%$ of revenues, and the production manager receives $$20,000$ for each dollar that per$-$unit production costs fall below $$280/$mbf$\mathrm{.}83$ The CEO owns $40\%$ of the company and receives no explicit bonuses; rather, the board of directors sets his pay after considering many different performance factors.

You are an internal auditor at EPL. As an internal auditor, you report directly to the board of directors. While conducting your review of the preliminary financial statements for $2024,$ you collected the following information:

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Fixed costs of production have been approximately $$34$ million per year.Inventory at the beginning of $2023$ was $$46,053,000$

In conversations with the controller, she tells you that she felt $2024$ had been a successful year despite the significant decline in lumber prices. She attributed the success to the ability of the factory to control costs, which resulted in cost of goods sold per unit declining by $2\mathrm{.}4\%.$ The production manager was in agreement with this assessment and pointed out that production costs decreased by $$10/$mbf from $$272$ to $$262/$mbf$.$Required:Analyze the information you have collected and evaluate EPL$$s performance in $2024.$ As the internal auditor, do you have any concerns? If so$,$ what would you recommend to the board of directors to address these concerns in the future?