Oropharyngeal Airway Device Break-Even Analysis: $114K/Month

Fixed costs $85.0K/mo Monthly fixed burn

Contribution margin 81% After variable costs

Break-even revenue $105K/mo Monthly target sales

Break-even timing Month 1 Launch month

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs stack up against break-even for an airway device supplier.

Lean Base Full

Monthly revenue Revenue sets the cash pool that absorbs direct costs and overhead. $ Low sales High sales Variable expenses Use direct manufacturing, freight, and sales costs that rise with volume. $ Low cost High cost

Money available to cover fixed costs $738,384 $994,833 revenue - $256,449 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs Use rent, salaries, software, and other monthly overhead. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which airway device supply expenses are fixed, variable, semi-variable, or semi-fixed?

Cost classification

Break-even is reliable only when each expense follows its real driver: units, revenue, or capacity. Here, fixed overhead is $33,300/month before payroll, while unit COGS runs $1.30 to $3.00 per device.

Expense	Cost	Break-Even Treatment	Common Mistake
Headquarters rent	Fixed	Include $12,000/month in fixed overhead for the relevant planning range.	Spreading rent per unit and making break-even look better as volume rises.
Quality management system software subscription	Fixed	Include $2,500/month as recurring operating overhead from Month 1 to Month 60.	Treating required compliance software like an optional usage expense.
Unit materials, labor, packaging, and inspection	Variable	Deduct per-unit COGS from contribution margin; modeled range is $1.30 to $3.00 per device.	Treating inventory purchases as profit-and-loss expense instead of cash tied in stock.
Sales commissions	Variable	Apply as a revenue-linked selling expense, starting at 5.0% in the first year and declining to 4.0% by Year 5.	Counting commissions as fixed payroll and overstating contribution margin.
Distribution and freight	Variable	Apply as a sales-linked fulfillment charge, starting at 3.5% in the first year and declining to 2.5% by Year 5.	Using one flat monthly freight number while unit shipments rise.
Warehouse overhead and inventory management labor	Semi-variable	Model a base operating load plus added handling as device volume, orders, and stock turns increase.	Assuming warehouse effort stays flat while annual units grow from 320,000 to 1,420,000.
Sales and engineering headcount	Semi-fixed	Add payroll in steps as staffing expands; sales managers rise from 1.0 FTE to 8.0 FTE and engineers from 1.0 to 3.0 FTE.	Modeling all payroll as variable commission or holding headcount flat through scale.

How does break-even shift from lean to base to full scale in airway device supply?

Scenario table

Higher volume spreads the same overhead across more sales, so break-even gets easier as you move from lean to full scale. Month 1 is the model signal, but timing still depends on account wins and inventory turns.

Planning figures only; actual break-even will move with product mix, order flow, and inventory turns.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean: Year 1 mix	$443.8k	$113.5k	$85.0k	74.4%	$245.3k	Month 1; about $114k monthly revenue covers fixed costs, so the cushion is thin if wins slip.
Base: Year 3 mix	$994.8k	$256.4k	$125.0k	74.2%	$613.4k	Month 1; about $169k monthly revenue covers fixed costs, so the cushion is stronger.
Full: Year 5 mix	$1.899M	$473.6k	$180.0k	75.1%	$1.246M	Month 1; about $240k monthly revenue covers fixed costs, and the cushion is strongest.

What breaks the break-even plan if revenue slips or costs rise?

Stress test

Month 1 still clears break-even, but the cushion shrinks fast if revenue misses plan, payroll rises, or freight and commission pressure hit margin. Combined stress can push break-even above planned monthly sales.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$114,203	$329,547 cushion	Month 1 stays well above break-even.
Revenue shortfall	Monthly revenue comes in 20% below plan.	$114,203	$240,797 cushion	Still profitable, but the cushion drops fast.
Fixed-cost increase	Fixed overhead rises 25% before volume catches up.	$142,753	$300,997 cushion	Added payroll and overhead raise the floor.
Margin pressure	Contribution margin falls to 19.2% as freight and commissions worsen.	$442,535	$1,215 cushion	A small price or fee miss nearly wipes out profit.
Combined pressure	Revenue is 20% below plan, fixed overhead rises 25%, and margin falls to 19.2%.	$553,130	$198,130 gap	The plan needs more revenue than it books.

What should the founder verify before ordering inventory, signing space, and hiring?

Founder checklist

This model hits break-even in Month 1, so the gate is whether the first-year volume, pricing, and launch cash still hold after real quotes. If they do not, do not commit to stock, space, or headcount yet.

1Demand proof320k units, $5.325M

Verify the combined first-year forecast still supports the opening run rate and the modeled Year 1 revenue before you place inventory orders.

2ASP mix$16.64 ASP

Verify the weighted average selling price stays near $16.64 across the mix, because a small price slip hits revenue fast.

3Unit COGS$1.30-$3.00

Verify direct unit cost stays inside this band before purchase orders, so gross margin does not drift below the plan.

4Contribution load8.5% Year 1

Verify sales commissions at 5.0% plus freight at 3.5% stay close to plan, since that is the first margin leak after unit cost.

5Fixed burn$33.3K/mo

Verify rent, software, insurance, utilities, legal, and trade show spend stay at this level, and do not let warehouse lease creep past the $12,000 monthly rent line.

6Cash gate$1.149M + $635K

Verify Month 1 cash covers the launch floor and the staged $635K buildout, and keep hiring tied to a proven pipeline rather than hope.