Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Accounting
Lesson Topic: distinguish between direct and indirect costs
Learning Objective/s:
  • Describe the difference between direct and indirect costs in manufacturing.
  • Identify examples of direct and indirect cost items.
  • Explain why distinguishing these costs is important for product costing and pricing decisions.
  • Apply the classification to sample cost items in a manufacturing account.
  • Construct a simple manufacturing account that combines direct and indirect costs to determine COGM.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed handouts of cost‑classification tables
  • Sample manufacturing‑account worksheet
  • Calculator for each student
  • Whiteboard markers and chart paper
  • Sticky notes for grouping examples
 Introduction:
Imagine you are pricing a new bicycle and need to know exactly how much each component costs. Review what you already know about material and labour expenses, then explain that today you will learn how to separate costs that can be traced directly to a product from those that must be allocated. By the end of the lesson you will be able to classify costs correctly and see why this matters for accurate product costing.
Lesson Structure:
  1. Do‑now (5'): Quick quiz on basic cost terms to activate prior knowledge.
  2. Mini‑lecture (10'): Define direct and indirect costs, provide real‑world examples.
  3. Guided classification activity (15'): In pairs, students classify a mixed list of cost items and justify their choices.
  4. Manufacturing account demonstration (10'): Show how direct and indirect costs flow into the account and calculate COGM.
  5. Whole‑class check (5'): Discuss any misconceptions and answer questions.
  6. Exit ticket (5'): Write one reason why distinguishing direct from indirect costs is essential.
Conclusion:
We reviewed the key differences between direct and indirect costs and saw how they combine in a manufacturing account to produce the cost of goods manufactured. Students hand in their exit tickets and receive a brief recap of the main points. For homework, complete the provided worksheet that requires preparing a full manufacturing account using a new set of cost data.