Final answer:
By calculating the contribution margin per unit based on the provided maximum unit sales, maximum profit, and fixed costs, we determine the profit for selling 2,500 units is £12,500. Hence, the answer is A. £12,500 profit.
Step-by-step explanation:
To calculate the profit or loss earned when selling 2,500 units, we need to determine the contribution margin per unit and the total fixed costs. The break-even point is at 2,143 units, which implies that at this point, total costs equal total revenues and hence the profit is zero. We can infer that the fixed costs must equal the total losses when no units are sold, which is £75,000. To find the contribution margin per unit, we need to know the variable costs per unit, but since these are not provided, we can use the maximum profit and maximum unit sales to estimate it.
At maximum unit sales of 5,000 units and £100 each, the total revenue is 5,000 × £100 = £500,000. With a maximum profit of £100,000, the total costs must have been £500,000 - £100,000 = £400,000. Therefore, the variable cost per unit can be estimated by the difference between total costs and fixed costs, divided by the number of units sold at maximum profit, which is (£400,000 - £75,000) / 5,000 = £65/unit. We can then find the contribution margin per unit, which is the selling price minus the variable cost per unit, so £100 - £65 = £35/unit.
Knowing the contribution margin per unit, we can calculate the profit at 2,500 units sold. The total contribution margin for 2,500 units is 2,500 × £35/unit = £87,500. Finally, we subtract the fixed costs from this total to find the profit: £87,500 - £75,000 = £12,500 profit. Thus, the correct answer is A. £12,500 profit.