Lesson Plan

• Distinguish fixed, variable, direct and indirect costs.
• Explain how each cost type behaves with output and its traceability.
• Apply cost classifications to break‑even, pricing and make‑or‑buy decisions.
• Calculate total and per‑unit costs using the standard cost formulas.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with comparative cost table
• Calculator for each pair
• Cost‑behaviour chart handout
• Laptop with spreadsheet software (optional)

Begin with a quick poll: “What cost would a business still pay if production stopped for a month?” Use the responses to highlight the relevance of cost classification in real decisions. Review students’ prior knowledge of basic cost concepts. State that by the end of the lesson they will be able to identify, compare and use the four main cost types in business calculations.

1. Do‑now (5') – Quick revision quiz (four questions from the source) to activate prior knowledge.
2. Mini‑lecture (10') – Define fixed, variable, direct and indirect costs; display the comparative table.
3. Guided practice (15') – In pairs, complete a partially‑filled cost classification table on the worksheet; teacher circulates for misconceptions.
4. Formula application (10') – Demonstrate TC = FC + VC and CPU = FC/Q + v; students solve a sample calculation.
5. Decision‑making scenarios (10') – Small groups analyse a break‑even and a pricing case, identifying which cost types are relevant.
6. Exit ticket (5') – Write one example of a cost that could be classified as both direct and variable, and one that is indirect.

Summarise the key differences between the four cost types and how they feed into cost formulas and business decisions. Collect the exit tickets to check understanding, and assign homework: complete the worksheet’s additional scenario questions on cost classification and break‑even analysis.