Biodegradable Packaging Plant Break-Even: $101K Monthly Revenue

Fixed costs $80.8K/mo Office + payroll

Contribution margin 84.8% After unit costs

Break-even revenue $94.9K/mo Monthly target

Break-even timing Month 15 Model break-even

Break-even calculator

Test how monthly revenue, variable expenses, and fixed monthly costs shape break-even for biodegradable packaging manufacturing.

Lean Base Full

Monthly revenue Revenue is the pool that must cover direct costs and overhead. $ Lower sales Higher sales Variable expenses These rise with output, freight, commissions, and payment fees. $ Lower costs Higher costs

Money available to cover fixed costs $109,689 $136,708 revenue - $27,019 variable expenses

Margin ratio

80%

Covers fixed costs

Yes

Fixed monthly costs These are monthly payroll, office, and overhead costs that do not move much with sales. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which biodegradable packaging manufacturing expenses are fixed, and which move with sales?

Cost classification

Break-even is reliable only if the $14,500 monthly office overhead and $66,250 Year 1 payroll stay separate from per-unit spend. Mix fixed overhead with materials or factory allocations, and the Month 15 break-even point can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $8,000 per month in fixed overhead for the current planning range.	Counting it again inside factory rent allocation.
Admin Office Utilities	Fixed	Use $1,500 per month as office overhead, not as a per-unit plant charge.	Blending office utilities with factory utilities.
Year 1 Salaried Payroll	Fixed	Use $66,250 per month based on Year 1 full-time equivalent staffing.	Treating salaried production staff like unit-based direct labor.
Raw Materials	Variable	Apply the unit rate by product, from $0.01 to $0.15 per unit.	Using one average material rate across all products.
Direct Labor per Unit	Variable	Apply the product-level unit rate, up to $0.08 per unit for custom work.	Adding the same labor twice through payroll and unit costs.
Factory Utilities	Semi-variable	Model as 1.0% of revenue because it rises with production activity.	Classifying all utilities as fixed overhead.
Production Supervision	Semi-fixed	Model as 1.2% of revenue as production scale expands.	Forcing supervision into direct labor per unit.
Factory Rent Allocation	Semi-fixed	Model as 1.5% of revenue as capacity usage grows.	Counting factory rent allocation and office rent as the same overhead line.

How does break-even shift from lean to full production for biodegradable packaging manufacturing?

Scenario table

Break-even improves as volume rises because fixed factory and office costs spread across more sales, while the variable cost load falls from 20.4% in lean to 18.4% in full. Lean stays below break-even; base turns slightly positive.

Planning cases only: actual margin, waste, and pricing can move break-even up or down.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$84,167	$17,170	$80,750	79.6%	-$13,753	Below break-even, so losses remain.
Base case	$136,708	$27,068	$91,250	80.2%	$18,390	Modestly above break-even, with a thin cushion.
Full-utilization case	$446,083	$82,113	$120,667	81.6%	$243,303	High volume covers fixed costs with room to spare.

What breaks the break-even plan if sales soften or plant costs rise?

Stress test

Year 2 has a cushion, but it isn’t wide. A sales dip to Year 1 levels, a small rise in fixed overhead, or a margin slip from input pressure can erase that buffer, and the combined case pushes the plant back into a monthly gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$113,735	$22,973 cushion	Positive, but the cushion is modest.
Revenue shortfall	Monthly revenue slips to Year 1’s $84,167.	$113,735	$29,568 gap	Sales softness pushes the plant below break-even.
Fixed-cost increase	Fixed monthly costs rise from $80,750 to $91,250.	$126,835	$9,873 cushion	Extra overhead cuts most of the buffer.
Margin pressure	Margin slips from 80.2% to 79.6% on resin, fiber, utilities, freight, and scrap pressure.	$114,618	$22,090 cushion	A small margin dip adds real pressure at scale.
Combined pressure	Year 1 revenue, Year 2 fixed costs, and a 79.6% margin hit at once.	$114,611	$30,444 gap	Sales softness plus cost pressure breaks the plan fast.

What should the founder verify before locking the manufacturing lease and equipment spend?

Founder checklist

Don’t sign the plant commitment until pipeline, cash, and ramp timing all line up with the Month 15 break-even path. If early sales stay near $84.2K a month, delay noncritical spend.

1Pipeline$84.2K/mo

Confirm signed orders or a real sales pipeline can hold early monthly sales near this level before you commit to the $750,000 manufacturing line.

2Fixed Load$80.8K/mo

Check that wages and office costs stay near this monthly load, because break-even only works if output covers the full overhead run rate.

3Unit Margin77.8% CM

Verify the product mix still leaves enough contribution after materials, labor, commissions, and payment fees, with custom packaging as the lowest-margin item.

4Tech Ramp4.0 FTE

Hire production technicians only against real volume, since the model starts with 4.0 technician FTE and the ramp only works if the line stays busy.

5Cash Cushion-$838K

Protect enough cash to survive the modeled trough in Month 24, because Year 1 EBITDA is still negative and the business burns cash before scale arrives.

6Quality TimingMonth 7-9

Stage the $200,000 automation spend and the $120,000 leasehold improvements only after quality control is proven on food containers and compostable cups at higher utilization.