Final answer:
To break-even at a reduced selling price of $65 per unit, the company needs to achieve a sales volume of approximately 307.7 units per month, resulting in a dollar volume of sales per month of approximately $20,000.
Step-by-step explanation:
To calculate the break-even point, we need to determine the contribution margin per unit and divide the fixed costs by the contribution margin per unit. The contribution margin per unit is calculated as the selling price per unit minus the variable costs per unit. In this case, the selling price per unit is $65 and the variable costs per unit are 40% of the selling price, which is $26. Therefore, the contribution margin per unit is $65 - $26 = $39.
To calculate the break-even sales volume, we divide the fixed costs ($12,000) by the contribution margin per unit ($39). So, the break-even sales volume is $12,000 divided by $39, which is approximately 307.7 units.
To find the dollar volume of sales per month required to break-even, we multiply the break-even sales volume (307.7 units) by the selling price per unit ($65). The dollar volume of sales per month required to break-even is approximately $20,000.