Kevin Hall, president of Wildhorse Recreation Products, Inc., is concerned about declines that he is beginning to see in the demand for the companys line of old school logo basketballs as new competitors enter the market. At a current contribution margin of $10, the company must sell 89,000 basketballs to generate the desired $230,000 in annual operating income. Based on a recent market research report, Kevin thinks the company can expect annual sales of only 55,625 basketballs in the future.

What is Kevins current level of fixed expenses?