To calculate the survival revenue breakeven point, we need to sum up all the fixed expenses that a business incurs, regardless of its sales volume. In this case, we have the following expenses:
- Administrative Expenses: $200,000
- Marketing Expenses: $180,000
- Depreciation Expenses: $100,000
- Interest Expenses: $20,000
Now, let’s add these expenses together:
- Total Expenses = Administrative Expenses + Marketing Expenses + Depreciation Expenses + Interest Expenses
- Total Expenses = $200,000 + $180,000 + $100,000 + $20,000
- Total Expenses = $500,000
Therefore, the survival revenues breakeven point for the business is $500,000. This means that in order to cover its fixed expenses and avoid losses, the company needs to generate at least $500,000 in revenue.