business expert?

Question

when your volume increases does your intrest costs remain the same but your profit gose up correct???

Answer 1

This is a deep rooted question. Let me assume you are a retailer for simplifying the answer. You need working capital for which interest need be paid for inventories. When the volume increases on demand your interest rate goes up on inventory and your profit goes up so does the interest.
For manufacturing it is similar though the demand and interest rates are pre planned so the profit remain to forecasted levels. Here there are good inventory control programs which will make sure that optimal inventory is maintained so that there won't be stockouts or overstocking.
In freemarket economies interest rates are not included in product costs. When the demand pull inflation happens the Central bank raises rates so that companies cannot raise prices randomly for fear of loosing their profit made on such hikes. Rising interest costs can also raise the financial risk of companies and can bring down the profits for increase in sales.