First, we need to calculate the total variable costs:
Variable costs = 40% x $325,000 = $130,000
Next, we can calculate the total costs:
Total costs = Fixed costs + Variable costs
Total costs = $72,500 + $130,000 = $202,500
Finally, we can calculate the pretax income:
Pretax income = Sales - Total costs
Pretax income = $325,000 - $202,500 = $122,500
Therefore, the pretax income would be $\$122,500$ (option b).