Packaging Manufacturing Break-Even: About $845K Monthly Revenue

Fixed costs $55.3K/mo Fixed cost base

Contribution margin 79% After variable cost

Break-even revenue $70.3K/mo Revenue target

Break-even timing Month 1 Launch month

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed monthly costs against break-even.

Lean Base Full

Monthly revenue Higher revenue spreads plant overhead across more sales. $ Low sales High sales Variable expenses Includes direct material, labor, freight, and sales costs that rise with output. $ Low costs High costs

Money available to cover fixed costs $441,312 $549,083 revenue - $107,771 variable expenses

Margin ratio

80%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly costs the margin must cover. $ Lean base Heavy base

Break-even chart Revenue Total costs

Which packaging manufacturing expenses are fixed and which move with sales?

Cost classification

Break-even is only as good as the cost labels behind it. Keep rent and core salaries fixed, treat unit inputs as variable, and separate plant overhead so the Month 1 break-even signal stays useful.

Expense	Cost	Break-Even Treatment	Common Mistake
Factory Lease	Fixed	Use $12,000 per month from Month 1 through Month 60, regardless of unit volume within the planned range.	Allocating the full lease to each unit and overstating variable expense.
Office Rent	Fixed	Use $3,500 per month as a stable operating expense in break-even planning.	Treating office space as production-driven when it does not move with orders.
Salaried Managers and Admin Wages	Fixed	Use base salaries for the general manager, production manager, sales manager, design engineer, and administrative assistant as fixed monthly overhead.	Blending salaried roles into direct labor and hiding the true overhead hurdle.
Raw Material Cost	Variable	Apply per unit: $0.35 for corrugated boxes up to $1.10 for sustainable wraps.	Using one average input rate and missing product-level margin differences.
Direct Labor Cost	Variable	Apply per unit: $0.10 for corrugated boxes up to $0.35 for sustainable wraps.	Treating all labor as fixed and overstating margin at low volume.
Factory Utilities	Semi-variable	Model the revenue-linked factory utility percentage by product, from 0.5% to 0.8% of revenue.	Treating all plant overhead as a unit expense instead of splitting usage-driven items.
Equipment Maintenance	Semi-variable	Model maintenance as revenue-linked by product, from 0.4% to 0.7% of revenue.	Holding maintenance flat while output rises across the forecast years.
Production Staff	Semi-fixed	Increase staffing in steps from 3.0 FTE in the first year to 7.0 FTE by Year 5.	Assuming labor scales smoothly with every unit instead of in hiring blocks.

How does break-even change from a lean plant to a full plant?

Scenario table

CM means contribution margin, or sales left after variable costs. As volume rises, fixed plant costs get spread over more sales, so break-even gets easier to cover.

Planning assumptions only; actual results will move with product mix, waste, and plant load.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean packaging line	$2.85M	$606K	$665K	78.7%	$1.57M	Closest to break-even, so misses hurt faster.
Base packaging plant	$6.59M	$1.29M	$740K	80.4%	$4.56M	Stronger overhead absorption and a wider cushion.
Full-scale packaging plant	$10.91M	$1.96M	$815K	82.0%	$8.13M	Best overhead absorption, with the safest buffer.

What pushes this packaging plant below break-even?

Stress test

The base plan clears break-even by about $1.53M a month, so it has room. The risk is a three-way squeeze: softer sales, higher fixed overhead, and even a 1-point margin drop can eat that cushion fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$845K	$1,526K cushion	Strong cushion, but it depends on sales staying near plan.
Revenue shortfall	Monthly sales slip to $845K.	$845K	$0 cushion	One more step down puts the plant under break-even.
Fixed-cost increase	Monthly fixed overhead rises $50K.	$1,495K	$876K cushion	Lease and support creep remove about $650K of room.
Margin pressure	Contribution margin drops 1 point.	$856K	$1,515K cushion	Higher scrap or outbound freight tightens the cushion fast.
Combined pressure	Sales fall to $845K, fixed overhead rises $50K, and margin drops 1 point.	$1,506K	$661K gap	This is the danger zone: sales, scrap, labor, and freight all move the wrong way.

What should you verify before signing the factory lease and hiring for packaging manufacturing?

Founder checklist

Before you sign the factory lease and hire, confirm the first-year order book can support the 405,000-unit build and the plant can carry the $66.5K monthly fixed load. The model reaches breakeven in Month 1, but Month 2 cash still bottoms at $1.063M, so reserve control matters.

1Launch Orders$2.845M Y1

Verify signed customer orders can fill the 405,000-unit first-year plan before you lock the lease and hire, because that is the demand proof behind Month 1 breakeven.

2Unit Margin~81.5% CM

Check that each line still clears raw materials, direct labor, consumables, inbound freight, waste, plus 3.0% sales commissions and 4.0% outbound logistics, because contribution margin drives the whole model.

3Fixed Load$66.5K/mo

Confirm the $21.1K monthly site cost and $45.4K monthly wage load stay funded, because this base cost has to be covered before profit shows up.

4Capacity Ramp3.0 to 7.0 FTE

Test machine throughput against 405,000 units in Year 1 and keep production staff aligned with the 3.0-to-7.0 FTE ramp, because underused or overrun lines burn cash fast.

5Capex Plan$640K

Approve the $640K capex plan only if vendor quotes, utility load, and maintenance coverage are in hand, because launch delays raise cash burn before output starts.

6Cash Cushion$1.063M

Hold at least the $1.063M minimum cash cushion in Month 2 after capex and payroll, because the business can hit breakeven on paper and still run short of cash.