Cocoa Processing Break-Even Analysis: $79K Monthly Revenue

Fixed costs $66.9K/mo Year 1 base

Contribution margin 84.6% After variable costs

Break-even revenue $79.1K/mo Cover fixed base

Break-even timing Month 13 Model break point

Break-even calculator

Test monthly cocoa revenue against direct processing costs and fixed overhead to see where break-even lands.

Lean Base Full

Monthly revenue Revenue sets the cash pool that covers direct costs and overhead. $ Lower sales Higher sales Variable expenses Direct beans, labor, materials, and shipping rise with each month of output. $ Lower costs Higher costs

Money available to cover fixed costs $150,709 $175,125 revenue - $24,416 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the contribution margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which cocoa processing expenses are fixed, and which move with sales volume?

Cost classification

Break-even only works if each expense moves the right way in the model. Treat beans, packaging, freight, and commissions as volume-linked, while rent stays fixed inside the normal monthly planning range.

Expense	Cost	Break-Even Treatment	Common Mistake
Raw Cocoa Beans	Variable	Model at $1.00 to $2.00 per unit, depending on the product.	Classifying beans as fixed inventory instead of unit-level input.
Direct Production Labor	Variable	Use $0.30 to $0.80 per unit based on product processing needs.	Putting all production labor into salaried overhead.
Packaging Materials	Variable	Apply $0.15 to $0.30 per unit as finished goods ship.	Ignoring packaging when testing contribution margin.
Logistics & Shipping	Variable	Use 4.0% of first-year revenue, then lower by forecast year.	Treating freight as fixed even when sales volume rises.
Sales Commissions	Variable	Use 2.5% of first-year revenue, then reduce by forecast year.	Forgetting commissions in break-even contribution margin.
Facility Utilities Production Share	Semi-variable	Model at 0.2% of revenue for production-linked utility load.	Treating all utilities as fixed office overhead.
Processing Facility Rent	Fixed	Hold at $15,000 per month from Month 1 through Month 60.	Spreading rent across units and calling it variable.
Processing Technicians	Semi-fixed	Step staffing from 2.0 FTE in Year 1 to 4.0 FTE in Year 5.	Modeling technician headcount as perfectly variable by unit.

How does break-even change as cocoa processing moves from lean to full output?

Scenario table

Break-even gets easier as output and mix improve because revenue rises faster than fixed costs. The lean case is still tight, the base case clears break-even, and the full case builds the widest cushion.

Planning assumptions only; actual break-even will move with bean costs, throughput, and product mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 run	$800k	$152k	$669k	84.2%	-$21k	Near break-even, so cost control matters.
Base Year 2 run	$1.25M	$224k	$719k	85.0%	$306k	Above break-even if wholesale volume holds.
Full Year 3 run	$1.75M	$294k	$757k	86.0%	$700k	Clear cushion, but payroll growth still matters.

What breaks first if cocoa sales slip or costs rise?

Stress test

This plan has almost no room for error. A small sales dip, a $5K monthly overhead bump, or a slight margin squeeze can wipe out the current cushion and push the business back below break-even.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; year 1 revenue holds at $800K per month.	$794K	$6K cushion	Only a thin cushion sits above break-even.
Revenue shortfall	Monthly revenue drops to $760K, about 5% below plan.	$794K	$34K gap	A modest sales miss turns the model negative.
Fixed-cost increase	Monthly fixed costs rise by $5K, from $669K to $674K.	$800K	$0 cushion	A small overhead bump uses up the full cushion.
Margin pressure	Contribution margin falls below 83.6% at $800K revenue.	$800K	$0 cushion	Raw bean, packaging, logistics, energy, or yield pressure can tip it into loss.
Combined pressure	Revenue falls to $760K while fixed costs rise by $5K and margin slips below 83.6%.	$800K	$40K gap	Lower sales and higher costs hit the same thin buffer at once.

What should the founder verify before locking the lease and equipment spend for cocoa processing?

Founder checklist

Do not lock the lease or buy the big machines until supplier contracts, buyer demand, and staffing clear the break-even bar. The model needs about $794K a month in demand, plus $439K of cash to absorb the Month 13 low point.

1Demand Proof$794K/mo

Confirm raw cocoa bean contracts and buyer demand can reach this level before you sign the lease, because the plant only works when both sides of the supply chain are real.

2Fixed Burn$66.9K/mo

Add the $22.7K fixed site costs and about $44.2K of Year 1 payroll to see the monthly burn you must cover before any variable profit helps.

3Margin Check84% CM

On the Year 1 mix, about 84% of sales stays after raw beans, labor, packaging, shipping, commissions, and overhead, so yield loss or freight creep cuts fast.

4QC Ready$800K

Stage the roaster, winnowing machine, grinder, press, conching machine, packaging line, warehouse racking, lab equipment, and office setup only after food safety, sanitation, quality testing, and QC staffing are in place.

5Capacity Ramp33K→50K

Check that the line can handle 33,000 units in Year 1 and 50,000 in Year 2 without overtime, missed fills, or extra scrap.

6Cash Cushion$439K

Hold enough working cash to reach the Month 13 low point, and wait on discretionary hires until sales stay above break-even, because Year 1 EBITDA is still -$76K.