Lesson Plan

• Describe the key assumptions underlying break‑even analysis.
• Identify at least six limitations of break‑even analysis.
• Analyse how each limitation can affect business decision‑making.
• Evaluate when break‑even analysis is appropriate and when alternative tools are needed.

• Projector and screen
• Whiteboard and markers
• Printed handout of the limitation summary table
• Calculator worksheets
• Break‑even chart diagram (digital or printed)
• Sticky notes for exit tickets

Begin with a quick real‑world example of a company that mis‑priced a product because it relied solely on break‑even figures. Ask students to recall the break‑even formula and its basic assumptions. Explain that today they will discover why those assumptions can limit the tool’s usefulness, and they will be able to judge when it is appropriate to use.

1. Do‑now (5'): Quiz on the break‑even formula and its components.
2. Mini‑lecture (10'): Present the five core assumptions and introduce the eight common limitations using slides.
3. Group case study (15'): In small groups, analyse a short business scenario and list which limitations are most relevant.
4. Whole‑class debrief (10'): Groups share findings; discuss how each limitation could change a decision.
5. Diagram activity (10'): Students label a break‑even chart, annotating where each limitation would shift the cost or revenue lines.
6. Exit ticket (5'): Write one limitation and a brief explanation of its impact on a managerial decision.

Summarise that break‑even analysis provides a useful snapshot but must be complemented by other quantitative and qualitative information. Collect exit tickets to gauge understanding, and assign a short homework task: research one alternative financial tool (e.g., contribution margin analysis or sensitivity analysis) and compare its strengths to break‑even analysis.