Combat Medical Kit Manufacturing Break-Even: Month 2 Viability

Fixed costs $71.3K/mo Year 1 base

Contribution margin 61.4% After variable costs

Break-even revenue $116K/mo Monthly target

Break-even timing Month 2 Launch ramp

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed costs for combat medical kit manufacturing.

Lean Base Full

Monthly revenue Revenue sets the margin pool that has to cover fixed costs. $ Low run rate Scaled run rate Variable expenses These direct costs rise as output and shipping volume rise. $ Lower direct cost Higher direct cost

Money available to cover fixed costs $117,500 $191,333 revenue - $73,833 variable expenses

Margin ratio

61%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your contribution margin must cover. $ Lean overhead Heavier overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a combat medical kit manufacturing break-even model?

Cost classification

Break-even shows Month 2, so the cost split has to be clean. Treat kit inputs and selling fees as volume-driven, plant overhead as semi-variable, and standing facility spend as fixed.

Expense	Cost	Break-Even Treatment	Common Mistake
Kit components and direct assembly labor	Variable	Subtract per unit for tourniquets, gauze, pouches, chest seals, case shells, airway kits, direct assembly labor, and packaging labor before calculating contribution margin.	Don’t bury direct assembly labor inside fixed overhead.
Sales commissions	Variable	Apply as a revenue-linked selling charge: 5.0% in the first year, falling to 4.0% by the mature year.	Using a flat monthly amount overstates margin when sales rise.
Shipping and logistics	Variable	Apply as a revenue-linked fulfillment charge: 3.5% in the first year, improving to 2.0% by the mature year.	Treating freight as fixed hides the cash drag from higher unit volume.
Facility utilities, quality insurance, maintenance, supplies, and waste disposal	Semi-variable	Model the combined 1.1% of revenue as plant overhead that rises with throughput but does not behave like direct materials.	Classing these as pure fixed spend makes break-even look too easy.
Manufacturing facility lease	Fixed	Carry $12,500 per month as standing overhead across the monthly planning range.	Allocating rent per kit can distort product-level margin.
Compliance, liability insurance, R and D, software, and marketing	Fixed	Include $20,500 per month: $3,200 compliance, $4,500 liability insurance, $5,000 R and D, $1,800 software, and $6,000 marketing.	Dropping these below the line understates required break-even revenue.
Quality control and government contract staffing	Semi-fixed	Step salary overhead up when headcount rises, including quality control moving to 2.0 FTE and contract staffing scaling to 3.0 FTE by Year 5.	Spreading stepped salaries evenly per kit misses capacity jumps.

How does break-even shift across lean, base, and full production?

Scenario table

Break-even rises as the mix moves from lean to full, but the cushion also widens because more sales spread the same overhead. Lean fits launch control, base fits staffed operations, and full fits throughput planning.

Planning assumptions only; actual order mix, staffing timing, and compliance costs can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch mix	$191k/mo	$815k/yr	$856k/yr	64.5%	$554k/yr	Break-even sits near $111k/mo, so launch volume clears it with a thinner cushion.
Base staffed mix	$522k/mo	$2.10m/yr	$1.03m/yr	66.6%	$3.00m/yr	Break-even moves to about $128k/mo, giving a stronger buffer in staffed operations.
Full throughput mix	$1.05m/mo	$4.01m/yr	$1.28m/yr	68.3%	$7.09m/yr	Break-even reaches about $156k/mo, but scale gives the widest cushion.

What could squeeze the break-even cushion for this combat medical kit manufacturer?

Stress test

Year 1 clears break-even, but the cushion is not huge once sales slip or overhead moves. At about $191k in monthly revenue and a 64.5% contribution margin, the plan still feels healthy, but a 15% sales miss or cost inflation cuts it fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$110.4k/month	$52.2k cushion	The base case clears break-even with room to spare.
Revenue shortfall	Monthly revenue falls 15%.	$110.4k/month	$33.6k cushion	Slow order conversion is the first risk to watch.
Fixed-cost pressure	Monthly fixed overhead rises 10%.	$121.6k/month	$44.9k cushion	Lease, compliance, and hiring creep can eat the buffer.
Margin pressure	Sales commissions and shipping rise 10%.	$116.9k/month	$45.7k cushion	Medical supply and freight inflation hits the cushion early.
Combined pressure	Revenue falls 15%, margin drops to 61.0%, and fixed costs rise 10%.	$128.6k/month	$20.8k cushion	Late conversion plus cost inflation leaves very little slack.

What should the founder verify before signing the facility lease and bulk-buying inventory for combat medical kits?

Founder checklist

Do the math before you lock the lease and place bulk orders. The model reaches break-even in Month 2, but only if supplier quotes hold, unit build costs stay near plan, and the $1.094M cash floor covers inventory, freight, and rejects.

1Supplier BOM$20.50-$235

Test the five kit build costs at $43.00, $103.00, $235.00, $20.50, and $64.00 before bulk buys so supplier drift does not break the unit math.

2Gross Margin68%-77% GM

Check that each kit still clears room after sales commissions and shipping, since the refill module is the tightest and the heavier kits carry the most margin.

3Fixed Load$33.0K/mo

Confirm the facility is truly needed before you sign, because the listed fixed spend already runs $33.0K a month before wages and the $580K capex plan.

4Staff RampMonth 13

Hire against throughput, not hope, because customer support and logistics start in Month 13 and the launch team has to carry the early order load.

5QC ProofMonth 3-9

Document inspection and reject steps before scale, since the testing lab spend only helps if bad lots are caught before shipment.

6Pipeline Cash$1.094M

Validate purchase orders before trade-show spend and keep the Month 2 cash floor, because inventory timing, freight, and rejected lots can eat the buffer fast.