DL, Here is what the manual states:
5.21 Combat Explanation
When one unit fires at another unit (whether by Direct or Indirect Fire), the basic method in which the attack is calculated is as follows:
(Modified Attack Strength) vs. (Modified Defensive Strength)
Direct Fire Target Density Value
– If the total Strength Points in the target hex exceeds 12, 12 is then subtracted from that number to arrive at an Excess Density Modifier. This value is then multiplied by 8% and by the SP of the firing unit (fractions rounded up), resulting in a density bonus. This density bonus is added to the nominal SP of the firing unit.
Example: A 3 Strength Point firing unit is firing at a target in a hex that contains a total of 19 Strength Points (the number of units that are in the hex is irrelevant). Since 19 is > 12, 12 is subtracted from 19, yielding an Excess Density Modifier of 7. This number is then multiplied by .08 (8%) and by the SP of the unit, resulting in 1.68, which is rounded up to 2. Thus, that unit would attack as if it had 5 SP.
Hope this helps.