Accents Associates sells only one product, with a current selling price of R80 per unit. Variable costs are 20% of this selling price, and fixed costs are R20 000 per month. Management has decided to reduce the selling price to R75 per unit to increase sales. Assume that the cost of the product and fixed operating expenses are not changed by this reduction in selling price.

At the current selling price of R80 per unit, what Rand volume of sales per month is required for Accents to earn a monthly operating income of R10 000?

1. R20 000
2. R750 000
3. R37 500
4. Some other amount