Plywood Manufacturing Break-Even Analysis: $74K Monthly Revenue

Fixed costs $24.0K Monthly base

Contribution margin 80% After variable costs

Break-even revenue $30.0K Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue against variable expenses and fixed costs to see where the plywood plant breaks even.

Lean Base Full

Monthly revenue Revenue is the cash pool that must cover direct costs and overhead. $ Low sales High sales Variable expenses These are timber, resin, labor, and outbound costs that rise with output. $ Low cost High cost

Money available to cover fixed costs $458,638 $537,609 revenue - $78,971 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead base that stays on even when volume dips. $ Low overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even only works if each expense follows the right driver. Sheets drive timber, resin, labor, freight, and packaging; lease, insurance, and salaried supervision set the monthly hurdle.

Expense	Cost	Break-Even Treatment	Common Mistake
Factory Lease	Fixed	Use $15,000 per month from Month 1 through Month 60 in the monthly break-even base.	Spreading rent per sheet and thinking volume removes the cash burden.
Insurance Property & Liability	Fixed	Use $2,500 per month as stable operating overhead across the planning range.	Using the wrong monthly amount or tying insurance to sheet volume.
Timber Logs	Variable	Charge timber by product unit, from $3.00 to $12.00 per sheet depending on grade and thickness.	Treating wood usage and veneer yield losses as overhead instead of margin drivers.
Adhesives Resins	Variable	Apply the per-sheet resin rate, from $0.50 to $1.80, directly against units produced.	Hiding resin swings in factory overhead instead of showing margin pressure by sheet type.
Direct Production Labor	Variable	Use the unit labor rates, from $0.30 to $1.00 per sheet, in contribution margin.	Blending direct labor with salaried management and losing the true unit economics.
Logistics Outbound	Variable	Model as a revenue-linked selling expense, starting at 1.2% in the first year and falling to 0.8% by the fifth year.	Treating freight as general overhead instead of a sales-volume drag.
Factory Utilities	Semi-variable	Use the 0.8% of revenue assumption, then check kiln power against actual production hours.	Flat-lining utilities even when kiln usage and sheet output change.
Production Manager Salary	Semi-fixed	Use $90,000 per year until capacity, shifts, or supervision needs move in a step.	Modeling management as a smooth per-sheet charge instead of a staffing step.

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

Scenario table

Lean output only just covers the fixed load, while base and full output spread the factory lease and salaried staff over more sales. That is why the break-even cushion gets wider as utilization rises.

Planning assumptions only; actual results can move with mix and utilization.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 mix	$267k	$49k	$60k	81.6%	$152k	Month 1 break-even is tight, so uptime matters.
Base Year 3 mix	$538k	$92k	$70k	82.8%	$365k	Year 3 volume gives a safer cushion over fixed lease and payroll.
Full-capacity Year 5 mix	$758k	$123k	$71k	83.8%	$550k	Year 5 scale gives the widest cushion and lowest break-even risk.

What pressures can push plywood manufacturing below break-even?

Stress test

Current revenue is about $2,667K versus a $738K break-even, so the plan starts with a $1,929K cushion. The fragile spots are weaker output, resin moving up from $0.50 to $1.80 per sheet, and fixed overhead creeping higher.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in price, output, or overhead.	$738K	$1,929K cushion	Healthy cushion, but keep freight and overhead below warning levels.
Revenue shortfall	Output falls to the 1,292-sheet monthly warning floor.	$738K	$0 cushion	At this floor, the plant only just covers fixed cost.
Fixed-cost pressure	Fixed overhead rises by $10K per month.	$861K	$1,806K cushion	Each extra $10K a month needs about $123K more revenue.
Margin pressure	Resin rises from $0.50 to $1.80 per sheet.	$1,633K	$1,034K cushion	A $1.30 resin jump per sheet adds about $895K to break-even.
Combined pressure	Resin rises to $1.80 per sheet and fixed overhead rises by $10K per month.	$1,756K	$911K cushion	Two hits together cut the cushion by more than half.

What should you verify before signing the plywood plant lease and buying the machines?

Founder checklist

Don’t commit until order volume, supplier quotes, machine throughput, staffing, and cash all line up with the model. This plan needs $1.945M of capex and still drops to a $305K cash low in Month 3, so runway is the hard stop.

1Order book56,000 sheets

Verify signed demand for the Year 1 mix across structural, furniture, and marine-grade sheets before you buy inventory and start the line.

2Input quotes$3.00 + $0.50

Lock timber log and adhesive resin pricing first, because those inputs set the floor for unit cost and protect the margin bridge.

3Line throughput$1.45M line

Test the press, veneer peeling machine, drying kilns, and glue spreader against the forecast output, and check utility load at the same time.

4Payroll load$435K/yr

Hire only when confirmed volume can support the direct crew and salaried roles, since Year 1 payroll already runs at $435K.

5Contribution81% CM

Check that blended contribution stays near model levels and that quality gates hold for structural, furniture, and marine-grade sheets, or rework will eat cash.

6Cash buffer$2.25M

Fund the $1.945M capex plan plus the $305K Month 3 cash low point before you commit to the lease or equipment orders.