Still staying with the data in Example 6.1, let us assume not only that the sales volume has the same three possible outcomes, but that, independent of the sales volume, the cost of labour will be:

l £3/unit (0.1 probable), or l £4/unit (0.7 probable), or l £5/unit (0.2 probable).

What are the possible outcomes and how likely is each one?

(Note that the word ‘independent’ in the above context means that the actual outcome as regards sales volume implies nothing about the labour cost that is most likely.)