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If
Activity level 80% 90%
Sales 135000 150000
cost 110000 120000
profit 25000 30000what is the profit at 85% activity level
Plz answer and concept
Change by 10% in activity level results change by 15 000 in sale, 10 000 in cost, and 5000 in profit, but you need find the figures with the change is just 5% (from 80% to 85%) so I would assume you can use a half of those figures listed above.
I would say at 85% sale is (135 000 +(1/2 x 15000) = 135 000 + 7500 = 142500,
cost 110000 +(1/2×10000) = 110000+5000 = 115 000 and profit 25000 +(1/2 x 5000) = 25000+2500 = 27500
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