Lesson Plan

• Describe the distinction between variable and fixed costs in contribution costing.
• Calculate contribution per unit, contribution margin ratio, and break‑even point.
• Analyse how contribution costing informs short‑run decisions such as pricing, product mix, and make‑or‑buy.
• Compare contribution costing with absorption costing regarding profit measurement and inventory valuation.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with Product X data
• Calculators (one per pair)
• Handout summarising contribution vs. absorption costing
• Break‑even chart template

Begin with a quick poll: “Which costs change when production rises?” Connect responses to prior lessons on cost classification. Explain that today’s success criteria are to compute contribution figures, use them for break‑even analysis, and evaluate short‑run decisions.

1. Do‑now (5') – Students answer three short questions on variable vs. fixed costs from the previous lesson.
2. Mini‑lecture (10') – Introduce contribution costing, key formulas, and the concept of contribution margin.
3. Guided practice (12') – Using the projector, work through the example calculation of contribution per unit and margin ratio for Product X.
4. Pair activity (10') – Learners complete a break‑even worksheet for Product X; teacher circulates to check calculations.
5. Comparative analysis (8') – Discuss the table contrasting contribution and absorption costing; students list two advantages and two disadvantages of each.
6. Exit ticket (5') – Each student writes one real‑world decision where contribution costing would be useful.

Recap the definition of contribution, how to compute it, and its role in break‑even and short‑run decisions. Collect exit tickets to gauge understanding, and assign homework: complete three additional contribution‑costing problems from the textbook.