Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Business
Lesson Topic: the difference between contribution and profit
Learning Objective/s:
  • Describe the concept of contribution and how it is calculated.
  • Explain the difference between contribution and profit, including the scope of costs.
  • Calculate contribution, contribution margin ratio, and profit from given data.
  • Apply contribution analysis to short‑term decision making such as pricing and product mix.
  • Interpret a comparison table to differentiate the two measures.
Materials Needed:
  • Projector or interactive whiteboard
  • Slide deck with formulas and tables
  • Printed worksheet with numerical example
  • Calculator for each student
  • Whiteboard markers
  • Exit ticket cards
 Introduction:
Begin with a quick poll: “If you sold a product for £50, what part of that money covers the costs you actually spend on each unit?” Review that variable costs change with output while fixed costs stay constant. Explain that today’s success criteria are to accurately compute contribution, distinguish it from profit, and use both to evaluate short‑term business decisions.
Lesson Structure:
  1. Do‑now (5'): Students answer the poll question on sticky notes; teacher notes misconceptions.
  2. Direct instruction (10'): Present definitions, formulas, and contribution margin ratio using slides.
  3. Guided practice (15'): Work through the numerical example together, completing a table on the board.
  4. Independent activity (15'): Students complete a worksheet calculating contribution and profit for a new scenario; teacher circulates for checks.
  5. Summary discussion (5'): Compare contribution vs profit using the comparison table and clarify any remaining doubts.
Conclusion:
Recap that contribution shows what remains after variable costs to cover fixed costs, whereas profit is what remains after all costs. For the exit ticket, ask students to write one real‑world situation where contribution analysis is more useful than profit. Assign homework to find a recent news article and identify the contribution and profit figures for the company discussed.