Cabinet Shop Break-Even Analysis: $48K Monthly Revenue Target

Fixed costs $40.4K/mo Overhead base

Contribution margin 84% After variable costs

Break-even revenue $48.1K/mo Monthly target

Break-even timing Month 1 First break-even

Break-even calculator

This calculator checks monthly cabinet revenue, direct costs, and overhead against break-even.

Lean Base Full

Monthly revenue Revenue is the monthly sales pool that pays direct costs and overhead. $ Low sales High sales Variable expenses These are direct costs that rise with each cabinet job. $ Low direct cost High direct cost

Money available to cover fixed costs $189,684 $222,608 revenue - $32,924 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that must be covered first. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which cabinet making expenses are fixed, and which move with each job?

Cost classification

Break-even only works when job-level materials and labor stay variable, while rent, payroll, and base overhead stay fixed. In this model, the first pass must cover $10,200 in monthly fixed expenses before salaried roles.

Expense	Cost	Break-Even Treatment	Common Mistake
Workshop Rent	Fixed	Count the $5,000 monthly rent in overhead before calculating required cabinet sales.	Underestimating the lease burden because it does not change with job count.
Lumber and Plywood	Variable	Tie material dollars to each kitchen set, bath vanity, home office, mudroom locker, and entertainment unit.	Pricing from revenue only and missing the material pull for each build.
Direct Craft Labor	Variable	Include per-unit shop labor, from $150 for a bath vanity to $800 for a kitchen set.	Double counting labor already included in salaried shop staff.
Installation Labor	Variable	Include project install time, from $75 for a bath vanity to $500 for a kitchen set.	Treating rework, punch-list visits, or extra install time as free.
Utilities	Semi-variable	Use the $1,200 monthly base bill, then layer in shop usage tied to production activity.	Ignoring finishing, machinery, and dust collection load as volume rises.
Vehicle Lease	Semi-fixed	Include the $700 monthly lease until delivery capacity requires another vehicle.	Treating delivery as only mileage and missing the standing lease payment.
Salaried Designer, Project Manager, and Admin Roles	Fixed	Include recurring payroll in overhead because these roles support jobs before margin turns positive.	Excluding design, management, and admin time from break-even coverage.

How does break-even shift from a lean cabinet shop to a fuller-volume shop?

Scenario table

Break-even stays positive in all three cases, but the cushion narrows as payroll and shop overhead rise faster than revenue. The lean plan has the widest buffer; the base and fuller-volume plans need tighter booking and install flow to hold it.

Planning figures only: these scenario numbers are assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch plan	$126,250	$20,765	$40,408	83.6%	$65,077	Revenue sits above the ~$48.4k break-even line, so the first-year plan has a solid cushion.
Base growth plan	$175,700	$27,895	$46,242	84.1%	$101,563	Revenue clears the ~$55.0k break-even line, but labor and install delays can cut the buffer fast.
Fuller-volume shop plan	$222,608	$34,037	$56,867	84.7%	$131,704	Revenue stays above the ~$67.1k break-even line, yet capacity limits can turn growth into strain.

What breaks first if cabinet revenue slips or shop costs run hot?

Stress test

The current plan clears break-even by a wide margin, with about $48,300 in monthly break-even revenue against $126,250 planned revenue. The cushion gets thinner fast if signed jobs slow, fixed overhead rises, or margin drops on rework and material inflation.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$48,300	$77,900 cushion	Healthy cushion if backlog stays full.
Revenue shortfall	Monthly cabinet revenue falls 20% to about $101,000 while margin holds.	$48,300	$52,700 cushion	Fewer signed kitchen jobs cut the cushion fast.
Fixed-cost pressure	Fixed overhead rises 15% to about $46,469 a month.	$55,600	$70,700 cushion	Payroll or rent added before backlog catches up.
Margin pressure	Contribution margin falls 5 points to about 78.6%.	$51,400	$74,800 cushion	Rework and material inflation tighten every job.
Combined pressure	Revenue falls 20%, fixed overhead rises 15%, and margin falls 5 points.	$59,100	$41,900 cushion	The plan still clears break-even, but the cushion gets much thinner.

What should the founder verify before signing the lease and buying more equipment?

Founder checklist

Before you sign the lease or buy more equipment, make sure the signed backlog clears the $48.4K monthly break-even target and the cash plan can absorb the launch spend. If one of those slips, the shop can look busy and still miss cash.

1Backlog$48.4K/mo

Verify signed work already covers the monthly break-even line before you commit to fixed overhead.

2Kitchen Price$25,000 ASP

Check that kitchen set quotes hold the Year 1 average selling price and still leave room after direct craft labor, install labor, commissions, and delivery.

3Bath Volume50 units

Confirm bath vanity demand can hit the Year 1 volume target, since that line helps fill the shop without pushing price down.

4Shop Rent$5,000/mo

Keep the workshop lease near the modeled rent so the fixed-cost load does not move the break-even target higher.

5Crew Ramp5.0 FTE

Plan around the Year 1 team first, and do not add hires or promise delivery dates until install capacity and supplier lead times for lumber, plywood, hardware, and finishing supplies are covered.

6Cash Buffer$1.172M

Keep working cash above the minimum cash assumption and treat the $238,000 one-time capex as separate from operating break-even.