Food Manufacturing Break-Even Analysis: $859K Monthly Sales

Fixed costs $63.1K/mo Base overhead

Contribution margin 82.6% After variable costs

Break-even revenue $76.3K/mo Run-rate target

Break-even timing Month 13 First break-even

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a food manufacturing operation.

Lean Base Full

Monthly revenue Revenue sets the pool that has to cover direct costs and overhead. $ Low sales High sales Variable expenses These are the costs that rise with output, like ingredients, packaging, freight, and sales commissions. $ Lean cost Heavy cost

Money available to cover fixed costs $70,065 $86,500 revenue - $16,435 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the contribution margin must cover before profit starts. $ Light overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Month 13 break-even only holds if unit-linked items reduce contribution margin and stable monthly items stay fixed. Misclassify ingredients, packaging, or payroll, and the revenue target will look cleaner than the plant’s real cash needs.

Expense	Cost	Break-Even Treatment	Common Mistake
Product ingredients	Variable	Subtract per unit before contribution margin; examples range from $1.30 almond butter to $2.80 chickpeas and spices.	Burying quinoa, chickpeas, berries, almonds, or vegetables in overhead.
Packaging, labeling, and sealing	Variable	Charge each unit for cups, jars, pouches, labels, and sealing, such as $0.40 compostable packaging or $0.30 glass jar and lid.	Treating packaging as fixed because it is bought in bulk.
Direct production labor	Variable	Include prep, mixing, forming, and cooking labor in unit economics when paid per unit or batch; modeled rates run $0.35 to $0.70 per unit.	Counting batch labor as salaried overhead when output drives the hours.
Sales commissions	Variable	Deduct 1.5% of revenue in every model year before testing break-even revenue.	Showing gross revenue without the sales payout drag.
Freight outbound	Variable	Deduct 0.5% of revenue as shipment volume rises with sales.	Leaving freight below EBITDA instead of reducing contribution margin.
Factory utilities base	Semi-variable	Model the usage-linked portion at 0.4% of revenue, and keep any true base charge separate if added later.	Treating all utilities like rent, even when production runs drive usage.
Operations, quality, sales, and admin payroll	Semi-fixed	Plan these roles in headcount steps; the listed salaries total $270,000 per year before any added production staff.	Spreading salaried managers across units and hiding the next hiring step.
Manufacturing facility lease	Fixed	Keep the $12,000 monthly lease in fixed overhead for the relevant planning range.	Letting rent rise with units before capacity actually changes.

How does break-even change from lean to full production?

Scenario table

Higher volume spreads fixed plant and staffing costs across more units, so break-even gets easier as the line moves from Year 1 to Year 3. Year 1 is thin, Year 2 is workable, and Year 3 has a clear cushion.

Planning view only; actual break-even can shift with yield, waste, mix, and selling price.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$86.5k	$16.4k	$63.1k	81.0%	$6.5k	Thin cushion; one short month can wipe it out.
Base ramp case	$163.5k	$30.6k	$66.8k	81.3%	$66.1k	Workable cushion; fixed costs are covered with room to absorb misses.
Full run-rate case	$287.4k	$52.7k	$70.6k	81.7%	$164.1k	Capacity-led; extra volume drops to profit faster.

What breaks the break-even plan for this food manufacturer?

Stress test

The base plan barely clears break-even, so a small sales miss or cost creep can push it negative. Supplier increases, labor overruns, cold storage waste, missed production runs, and slow wholesale reorders are the main warning signs.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$859K	$6K cushion	Only a thin cushion remains.
Revenue shortfall	Revenue falls 10% from the base plan.	$859K	$65K gap	A small demand miss turns the month negative.
Fixed-cost pressure	Fixed costs rise 10%.	$945K	$80K gap	Overhead creep wipes out the cushion fast.
Margin pressure	Variable expenses rise 5 points, cutting contribution margin to about 76%.	$916K	$51K gap	Supplier and packaging pressure can push you under break-even.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and contribution margin drops 5 points.	$1.01M	$229K gap	The month swings to about a $174K loss.

Are you ready to commit to the lease, equipment, and team for this food manufacturing plan?

Founder checklist

Don’t lock the lease, full-time staff, or equipment buy until purchase orders, throughput, and cash all clear the break-even path. The plan only works if demand fills the first-year run rate and the Month 13 cash low stays covered.

1Demand Proof$86.5K/mo

Verify signed purchase orders and repeat buyers can fill the first-year sales run rate, or the fixed load will outrun revenue.

2Fixed Load$63.1K/mo

Check that lease, insurance, software, professional fees, office, marketing, maintenance, and wages can all be covered every month.

3Unit Margin81% CM

Confirm contribution margin, the cash left after variable costs, stays near 81% after ingredients, labor, packaging, freight, and sales commissions.

4Throughput45K units

Verify the line can make the Year 1 volume before you add headcount, because hiring ahead of throughput raises burn fast.

5Cash Buffer$638K min

Keep at least the model’s minimum cash ready, because the low point lands in Month 13 and setup spend hits before break-even.

6Launch Stack$680K capex

Stage the equipment build across production line, cold storage, prep stations, packaging, QA lab, racking, IT, and the van, and have food safety software, QA support, audit fees, and certification costs in place first.