June 2012 q1

Let me explain the first two years sales figures (the rest of the years, and the variable cost figures all follow the same logic).

Year one sales without inflation would be 50,000 x 25 = 1,250,000.
However there is one years inflation at 4%, the actual sales will be 1,250,000 x 1.04 = 1,300,000

Year two sales without inflation would be 95,000 x 24 = 2,280,000.
However because it is in two years time, there is two years inflation and so you need to multiply by 1.04 twice.
2,280,000 x (1.04)^2 = 2,466,048

I hope that makes sense. If it does then try the remaining sales figures, and the variable costs, the same way.