Profitability & Business · 7 min
Cakes vs. Cookies: Compare Profit per Hour of Work
Compare products using contribution after variable cost divided by active working time.
Use contribution, not revenue
For each product subtract ingredients, packaging, fees, and other variable cost from sales, then divide the contribution by active working hours.
Worked example
Educational example: cookies contribute $42 over three hours, or $14 per active hour. A custom cake contributes $90 over eight hours, or $11.25 per active hour.
Keep context
The higher hourly figure is not automatically the better product. Demand, batchability, lead time, brand value, cancellations, and capacity still matter.
Avoid counting oven time twice
Choose a consistent definition for active and elapsed time. Include supervision and tasks you cannot use elsewhere, but do not invent labor while you are doing unrelated work.
Use your own verified receipts and label every example as an estimate.
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