How do I calculate the firms financial breakeven (assuming a 40% tax rate) if I know it has $5M of 10% bonds and $3M of 12% preferred stock outstanding? I want to understand how to do this, not just the correct answer.

What have you tried? I'm sure your textbook has the formulas. Remember, taxes and dividends are negatives so more sales must be made to offset them. However, if you Google "calculating a firm's break even point", you will find hundreds of hits.