Peanut Butter Manufacturing Break-Even: $38K Monthly Revenue

Fixed costs $31.2K/mo Month 1 base

Contribution margin 83% After variable costs

Break-even revenue $37.5K/mo Monthly target

Break-even timing Month 26 Cumulative turn

Break-even calculator

Check whether monthly peanut butter revenue covers direct costs and the fixed factory cost base.

Lean Base Full

Monthly revenue Revenue sets the pool left after direct costs to cover the factory overhead. $ Slow month Strong month Variable expenses These are the direct costs that rise with each jar and gift set sold. $ Tight costs Higher costs

Money available to cover fixed costs $21,688 $26,083 revenue - $4,395 variable expenses

Margin ratio

83%

Covers fixed costs

$13,495 short

Fixed monthly costs This is the monthly overhead the business has to cover before profit starts. $ Lean setup Heavier setup

Break-even chart Revenue Total costs

Which peanut butter manufacturing expenses are fixed, variable, semi-variable, or semi-fixed?

Cost classification

Break-even gets reliable when unit-linked costs stay in contribution margin and capacity costs stay below it. Misclassify rent, freight, or plant payroll, and the Month 26 break-even can look cleaner than the factory economics really are.

Expense	Cost	Break-Even Treatment	Common Mistake
Raw Peanuts	Variable	Apply per unit by product: $0.90 for classic and honey, $1.20 for organic, and $2.20 for gift sets. First year raw peanuts total $23.2K from the unit forecast.	Using one blended peanut rate and missing mix shifts.
Packaging Material and Labeling	Variable	Move directly with units produced. Classic items carry $0.25 packaging and $0.05 labeling per unit; gift sets carry $1.20 packaging and $0.20 labeling per unit.	Treating jars, lids, labels, and gift packaging as a fixed supply budget.
Shipping & Fulfillment (DTC)	Variable	Load into contribution margin as a sales-linked charge. The model starts at 3.0% of revenue in the first year and steps down to 2.0% by the fifth year.	Leaving freight below gross margin and overstating break-even profit.
Factory Rent	Fixed	Use $5,000 per month as the plant occupancy hurdle before profit. Keep the 0.5% factory rent allocation separate as a reporting allocation, not a true cash driver.	Modeling rent as fully variable because it appears in COGS allocation.
Administrative Utilities	Fixed	Use $300 per month for office and administrative service. It does not rise with jars produced in the monthly break-even range.	Blending office utilities with production utility usage.
Factory Utilities Allocation	Semi-variable	Model the plant usage load at 0.3% of revenue and keep it separate from administrative utilities. It should rise with production activity, even if some service base remains.	Treating all utilities as fixed overhead.
Equipment Maintenance Fund	Semi-fixed	Use the 0.4% of revenue model charge as a proxy for wear, service intervals, and capacity strain. Review it when equipment hours or line count changes.	Smoothing maintenance as pure variable expense with no capacity step.
Production Staff Payroll	Semi-fixed	Keep planned headcount as a capacity block: 2.0 FTE in the first year, rising to 5.0 FTE by the fifth year. Direct labor per unit stays separate in COGS.	Treating all plant labor as variable when payroll is planned headcount.

How does break-even risk change from a lean launch to a full peanut butter production run?

Scenario table

Fixed factory costs do not move much, so more output spreads rent, wages, and admin across each jar. Year 1 stays below break-even, Year 3 carries a cushion, and Year 5 covers overhead with more room.

Planning assumptions only; actual yields, mix, and freight can shift the break-even line.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$26K	$5K	$32K	80.1%	-$11K	Below break-even; needs more volume.
Base steady case	$96K	$18K	$48K	81.2%	$30K	Above break-even; adds a usable cushion.
Full-scale case	$168K	$30K	$54K	82.3%	$84K	Comfortably above break-even; overhead is well covered.

How much sales or cost pressure can this peanut butter factory take before break-even slips?

Stress test

Base break-even is about $382K a month, but Year 1 sales are only about $261K. That leaves a thin cushion, so peanut inflation, packaging and freight pressure, or a small overhead miss can push the plan deeper into the red.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; launch sales stay at the modeled run rate.	$382K/mo	$121K gap	Still below break-even at the launch run rate.
Revenue shortfall	Year 1 sales fall 15% from $261K to $222K.	$382K/mo	$160K gap	A modest sales miss quickly widens the cash hole.
Fixed-cost pressure	Monthly overhead runs 10% higher than planned.	$420K/mo	$159K gap	Overhead creep raises the bar even if sales hold.
Margin pressure	Raw peanut cost rises 20%, and packaging plus shipping and fulfillment rise 25%.	$389K/mo	$128K gap	Input inflation eats most of the launch cushion.
Combined pressure	Peanut inflation, packaging and freight pressure, and overhead all rise together.	$435K/mo	$174K gap	Stacked shocks push break-even far beyond launch sales.

What should you verify before you sign the factory lease and buy the line?

Founder checklist

Stress-test the factory commitment against the model first. With $7.85K monthly fixed costs, $280K Year 1 payroll, $355K planned capex, and a $617K cash floor before the Month 25 low point, the setup only works if demand, throughput, and sanitation controls are in place before launch.

1Reserve Cushion$617K

Verify the cash floor can carry the plan through the Month 25 low point, because breakeven does not land until Month 26.

2Fixed Burn$7.85K/mo

Verify the $5,000 factory rent plus the other fixed costs stay inside the monthly burn, because overhead has to be covered before profit shows up.

3Unit Margin$1.45/unit

Verify smooth and crunchy keep direct cost at $1.45 a unit before the 1.5% revenue-based overhead, because margin loss hits a factory model fast.

4Line Install$205K

Verify the roaster, grinder, and filling line are installed before test production, because the core line spend drives actual output.

5Labor Ramp$280K

Verify Year 1 payroll for the CEO, operations manager, production staff, and sales support is funded, because the team costs land before scale does.

6Launch Demand$313K

Verify the forecast mix can sell about $313K in Year 1 and that the $30K raw inventory, labels, jars, lids, gift packaging, and sanitation controls are ready before shipment, because launch fails fast when stock or pack-out is short.