Variable costs

Variable costs move with the work itself. Supplies and lab fees are the clearest examples (do more crowns and the lab bill goes up, do fewer and it goes down), and associate or hygienist compensation paid as a percentage of production behaves the same way even though it looks and feels like a fixed salary line.

This is the piece most napkin break-even math gets wrong. An owner divides fixed costs by production and gets a number that looks encouraging, because it never accounts for the chunk of every new dollar that immediately goes back out the door as supplies, lab and doctor pay. The honest model treats those percentages as a reduction to the margin available to cover fixed costs, not as a separate bucket to worry about later, which is why break-even is almost always higher than it looks on the back of an envelope.

For most general practices, supplies and lab together run 12–20% of production combined, and doctor compensation adds another meaningful slice on top of that. Know your real percentage before you calculate anything else; guessing low here is the most common way owners underestimate what the schedule actually needs to produce.