Having attained your MBA, you are certain that the best use of your newfound funds is to invest in your own wholesale solar panel manufacturing firm. You anticipate first year sales to reach $2.3 million dollars. You anticipate earning a pretax profit of $750,000 during your first full year of operations. You anticipate your variable costs to remain near 25 percent of your sales throughout the year.
Determine what the maximum fixed costs will be if you are to meet your pretax profit estimate.
Once you determine your maximum fixed costs, determine your breakeven level of sales based on that number.