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Course 167 · Money course 38

Cost Products and Choose a Profitable Mix

Produce a two-product costing and constrained-capacity model with contribution, overhead, bottleneck minutes and a demand-limited production recommendation. Use complete original records and independently checked changed-input practice.

Before you start

Recommended preparation: Test a Reselling Idea with Real Costs.

Test a Reselling Idea with Real Costs See everything you’ll need

Free download · Original practice data · No external account required. Download the starter pack

What you’ll leave with

A two-product costing and constrained-capacity model with contribution, overhead, bottleneck minutes and a demand-limited production recommendation.

Start course Start without an account. Sign in to save lesson progress across devices.

Your project

Start with the practice files. Build your project one lesson at a time.

Practice files are free without an account. Sign in to save your project record in My Proof: a description, checklist, and optional work link. Keep the original files in your own app or notebook; saving a project record does not upload them.

  1. Get your materialsDownload practice filesSupplied practice cases, a blank working record, complete lesson instructions, and annotated worked examples.
  2. Make your projectView the project checklist Work in your own notebook, document, or software. Use the supplied practice examples when you prefer.
  3. Keep a private recordSave a project record Sign in to save a description and checklist, then return to update them.
Course handbook

Know the route before you begin.

Here’s what you’ll need and what you’ll make. You can return to this guide during any lesson.

Who this is for

Learners ages 14+ and adults studying future or current business decisions through fictional cases; no financial transaction is required.

Prepare before lesson one
  • Recommended preparation: Test a Reselling Idea with Real Costs.
  • Use paper or a local spreadsheet and calculator. Supplied records contain no real identities or accounts.
  • Preserve original financial files in your own tool; My Proof stores a project description, checklist and optional work link.
Your final project

Finish with proof you can use.

A two-product costing and constrained-capacity model with contribution, overhead, bottleneck minutes and a demand-limited production recommendation.

Save a project record in My Proof
See project checklist and review criteria

Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.

What to include

  • A cost-classification and unit-cost schedule.
  • A contribution schedule and two-product profit bridge.
  • An overhead-rate and applied-versus-actual reconciliation.
  • A capacity feasibility and contribution-per-minute table.
  • A checked feasible product mix with an explicit tie and resource ledger.
  • A price/capacity sensitivity and conditional product-mix recommendation.

Review and revise

Use these criteria to check your work and choose what to improve.

  • Costs: behavior, units and overhead assignment are explicit.
  • Feasibility: time/demand/whole-unit constraints hold.
  • Objective: contribution and fixed-pool profit reconcile.
  • Decision: ties and changed-price/capacity scenarios are checked.
Three ideas to help you along the way
Three useful ideas

The rules behind the steps.

01

Use the scarce denominator

Compare contribution per constrained minute.

02

Allocate visibly

Keep fixed reporting assignments separate from incremental decisions.

03

Respect whole units

Check feasibility and ties rather than rounding up.

What do these words mean?
Key words

Key terms worth knowing.

Contribution
Price minus variable unit cost.
Bottleneck
The stated scarce productive resource.
Overhead rate
Estimated pool divided by an activity base.
Demand cap
Maximum units assumed sellable.
Indivisibility
The requirement to produce whole units.
Your route

6 lessons.
One useful project.

Work in order the first time. Each lesson makes something the next lesson can use.

  1. 1
    Up next

    Classify production costs

    Separate per-unit variable costs from the monthly overhead pool.

  2. 2
    14 min

    Calculate product contribution

    Compute contribution per unit, ratio and total independently of allocated fixed overhead.

  3. 3
    14 min

    Allocate overhead transparently

    Apply a stated overhead rate and distinguish allocated from actual overhead.

  4. 4
    14 min

    Find the real capacity limit

    Translate product quantities into bottleneck use and contribution per constrained minute.

  5. 5
    19 min

    Choose a demand-limited product mix

    Compare feasible whole-unit mixes and state when multiple maximum solutions tie.

  6. 6
    16 min

    Stress-test price and capacity

    Recompute product priority and feasible profit after a linked price or capacity change.

Use the tools

Tools to help you practice.

See all tools
ZIP · practice files

Cost Products and Choose a Profitable Mix practice files

Supplied practice cases, a blank working record, complete lesson instructions, and annotated worked examples.

Text worksheet

Your course project worksheet

A downloadable text worksheet with each lesson’s working output, space for your answers, and the shared final-project checklist. Save your own copy.

Source transparency

Sources and further study.

Explore the references behind the lessons and take your learning further. Source notes explain access and reuse.

Open Stax: Constrained resources
Source & access notes · checked 2026-10-01

Read unit contribution per scarce resource. This course adds its own whole-unit demand limits and exhaustive small-case comparison.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

Open Stax: Contribution margin
Source & access notes · checked 2026-10-01

Read cost behavior and unit/total contribution formulas. Original two-product case replaces all published examples.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

Open Stax: Predetermined overhead
Source & access notes · checked 2026-10-01

Read estimated pool/activity rate and application versus actual overhead; no source activities copied.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

Ready when you are

Start with the first useful move.

You’ll always know what to do, what to make, and where to go next.

Start lesson one