Product Packaging Manufacturing Break-Even: $128K/Month

Fixed costs $101.2K/mo Payroll plus overhead

Contribution margin 78.5% After variable costs

Break-even revenue $128.9K/mo Monthly target

Break-even timing Month 2 Early ramp point

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see when a packaging line covers overhead.

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct costs and overhead. $ Low sales High sales Variable expenses These are direct costs that rise with each order or unit made. $ Low direct High direct

Money available to cover fixed costs $373,437 $452,875 revenue - $79,438 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which packaging manufacturing expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even is only useful if plant overhead stays separate from order-driven production spend. Here, fixed monthly overhead starts with $32,300 before payroll, while materials, direct unit labor, commissions, and freight move with volume or revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Raw materials: paperboard, silica sand, plastic pellets, polymer film, steel sheets	Variable	Apply per unit produced, from $2.00 polymer film to $25.00 steel sheets.	Treating bulk material buys as fixed just because purchasing happens monthly.
Direct unit labor for box, glass, plastic, film, and steel production	Variable	Model per unit, from $0.70 direct printing labor to $8.00 direct fabrication labor.	Blending direct labor into salaries and hiding margin changes by product line.
Sales commissions and logistics & shipping fees	Variable	Use revenue percentages; first year is 2.0% commissions plus 1.5% shipping fees.	Calling freight fixed when more orders create more shipments.
Factory rent, administrative salaries, software, insurance, legal, office utilities, security	Fixed	Carry $32,300 per month before payroll: $15,000 rent, $10,000 admin, and $7,300 other overhead.	Spreading fixed overhead per unit and assuming it falls when sales miss plan.
Factory utilities and production energy	Semi-variable	Use a base plant load plus usage tied to output; model listed usage items as revenue-linked drivers.	Treating utilities, furnace fuel, molding energy, and extrusion power like rent.
Waste management, scrap reprocessing, and recycling	Semi-variable	Scale with production volume and scrap rates, not just calendar months.	Locking scrap disposal at one monthly number while unit volume grows.
Machine operators	Semi-fixed	Step staffing with capacity: 3.0 FTE in the first year grows to 8.0 FTE by the fifth year.	Making every operator hour variable, or freezing headcount while volume rises.
Quality control technicians and production supervisors	Semi-fixed	Add staff in steps as shifts, lines, and inspection load increase.	Treating quality assurance staffing as fixed even when more batches need checks.

How does break-even change from lean ramp-up to full utilization?

Scenario table

Here’s the quick math: higher output spreads plant overhead across more sales, so break-even gets easier as the line fills up. That cushion still depends on keeping scrap, labor, freight, and materials under control.

Planning assumptions only; actual break-even will move with mix, scrap, and setup loss.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean ramp-up	$1.88M	$404k	$1.00M	78.5%	$477k	Above break-even, but changeovers still pressure cash.
Base steady order book	$4.53M	$894k	$1.22M	80.3%	$2.42M	Best fit for a steady order book and solid cushion.
Full utilization with lower setup drag	$8.89M	$1.65M	$1.44M	81.5%	$5.81M	Strongest cushion, if scrap and freight stay tight.

What breaks the break-even plan for this packaging plant?

Stress test

The base plan clears break-even, but the cushion narrows fast if sales miss plan or factory costs rise. The real risk is a combined hit from softer demand, higher scrap, and freight or labor pressure.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1,276k	$607k cushion	Healthy base cushion, but not wide.
Revenue shortfall	Monthly revenue falls 10% to about $1,695k.	$1,276k	$419k cushion	Still above break-even, but room tightens fast.
Fixed-cost pressure	Fixed costs rise 10% to about $1,102k per month.	$1,404k	$479k cushion	Overhead inflation pushes break-even up.
Margin pressure	Variable expense ratio rises to about 23.6% of revenue.	$1,311k	$572k cushion	Raw material, scrap, and freight pressure hit fast.
Combined pressure	Revenue drops 10%, variable ratio rises to 23.6%, and fixed costs rise 10%.	$1,443k	$252k cushion	Still survives, but the margin of safety gets thin.

Can this packaging plant clear break-even before you sign the lease, buy the line, and hire the crew?

Founder checklist

Treat this as a go or no-go check, not a build decision. Before you commit, prove demand, supplier terms, staffing, and cash timing against the first-year 47,000-unit plan and the Month 9 cash trough of -$723K.

1Demand Proof5 SKUs

Confirm sample approvals for boxes, bottles, jars, wrappers, and drums so reorder flow is real before you lock the plant.

2Order Volume47,000 units

Verify minimum order quantities and reorder timing line up with Year 1 volume, or the line will be built for demand you do not have yet.

3Fixed Burn$100.2K/mo

Check that rent, admin, software, insurance, legal, utilities, security, and wages stay inside the gross profit you can make from early runs, and track the plan against $1.276M in monthly revenue.

4Margin Check79% CM

Verify unit prices still leave enough contribution margin, meaning profit after variable costs, after materials, labor, sales commissions, and shipping fees.

5Staffing Ramp3 operators

Run pilot batches before full hiring so machine operator hours grow only after production quality and throughput hold up.

6Cash Cushion-$723K

Hold enough working capital for inventory and receivables, because the model shows a Month 9 cash low that can stop growth early.