Lesson Plan
Course Title: Principles of Business, Marketing, and Finance
Session Title: Factors Affecting A Company’s Income Statement
Performance Objective:
The student differentiates between the types of economic systems with emphasis on the private enterprise
system and the United States economy.
Specific Objectives:
4 (3) (D) Identify factors affecting a business’ profits, revenues, and expenses.
Preparation
TEKS Correlations:
This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result
in the elimination of one or more of the TEKS listed.
Interdisciplinary Correlations:
English:
§110.42. English I (c) The student is expected to:
(8)(B) read in such varied sources as diaries, journals, textbooks, maps, newspapers, letters, speeches,
memoranda, electronic texts, and other media;
(6)(A) expand vocabulary through wide reading, listening, and discussing; and,
(4)(F) compile written ideas and representations into reports, summaries, or other formats and draw
conclusions.
Economics:
§118.2. Economics (c) The student is expected to:
(21)(A) Analyze the societal values that determine how a country answers the basic economic questions.
Instructor/Trainer
References:
1. Brown, Betty J. & Clow, John E. (2003). Introduction to Business: Fifth Edition. New York: Glencoe/MacGraw Hill.
2. ________ (2007). Beginner’s Guide to Financial Statements. Retrieved from U.S. Securities and Exchange
Commission Web site: http://www.sec.gov/investor/pubs/begfinstmtguide.htm
3. Penn, Pace (2010, February 13). The four factors of production. Retrieved from University of North
Carolina at Chapel Hill, LEARN NC Web site: http://www.learnnc.org/lp/pages/3760
4. Rubistar. (2000 – 2008). Retrieved from ALTEC of University of Kansas Web site:
http://rubistar.4teachers.org/index.php
Instructional Aids:
1. Optional – Overhead, SmartBoard, Internet, ELMO (if available and where applicable)
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1
Materials Needed:
1. Textbook
2. Internet
Teacher Preparation:
Instructor should become familiar with the balance sheet and income statement in order to better assist
students with this lesson.
Learner Preparation:
Learners will review vocabulary terms, review financial statement (income statement and balance sheet)
components/terms, and read textbook the night before.
Lesson Plan
Vocabulary:
Factors of Production
The economic resources used to produce goods and services.
Natural Resources
Raw materials found in nature used to produce goods.
Human Resources
The knowledge, efforts, and skills people bring to their work, also called labor.
Capital Resources
Things such as buildings, materials, and equipment used to produce goods and services.
Entrepreneurial Resources
The initiative to improve goods and services or create new ones.
Fixed Expenses
Fixed expenses are expenses that occur regularly and that must be paid regularly.
Variable Expenses
Variable expenses are expenses that fluctuate and over which you have no control.
Income Statement
A report of the net income or loss over an accounting period.
Revenue
Government or business income [from sales of services or products].
Expenses
Items that the government or businesses spend money on. Fixed expenses are those that occur regularly and
that must be paid regularly [rent]. Variable expenses are those that fluctuate and over which there is no control
[utilities].
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2
Net Income
The amount by which revenue exceeds expenses.
Net Loss
The amount by which expenses exceed revenue.
Cost of Sales [or Cost of Goods Sales]
The amount of money that the company spent to produce the goods and services sold during the accounting
period.
Brown, Betty J. & Clow, John E. (2003). Introduction to Business: Fifth Edition. New York: Glencoe/MacGraw Hill.
________ (2007). Beginner’s Guide to Financial Statements. Retrieved from U.S. Securities and Exchange
Commission Web site: http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Introduction (LSI Quadrant I):
Outline
Outline (LSI Quadrant II):
Instructors can use the PowerPoint presentation, slides, handouts, and note pages to support and reinforce the
following outline.
MI
Outline
Notes to Instructor
I. Application – Guided Practice
I.
Application – Guided Practice
A. Students complete an
1. Direct students to UNC at Chapel Hill
activity that allows them to
LEARN NC online lesson: The four
begin understanding the
factors of production (see
factors of production.
PowerPoint 2)
B. Students collaboratively list
2. Print and distribute assignment from
items as specific factors of
website:
http://www.learnnc.org/lp/pages/3760
production.
3.
Inform
students that the lesson has
C. Students learn about
been modified [for simplicity
financial statements,
purposes]. Class will use apple juice
focusing on the income
See Multiple
instead of Almond Joy. Distribute
statement.
Intelligences
apply juice boxes.
(MI) key
4. Allow students to first generate their
below.
own list.
II. Application – Independent
5.
Next,
have the students to talk about
Practice
their list.
A. Students repeat the
6. Write the combined list in a visible
guided practice activity
area; avoid duplicating responses
using potato chips.
(invite a “scribe” to write down the
B. Students sort items,
responses).
classifying them as specific
7. Utilize PowerPoints 3 – 7 to guide the
Copyright © Texas Education Agency, 2011. All rights reserved.
3
factors of production.
C. Students brainstorm two
methods to increase a
business’ profitability by
increasing revenue, and/or
decreasing cost of sales,
and/or decreasing
expenses.
D. Students share their
suggestions with the class.
students through the factors of
production.
8. Timeline is not required.
B. Utilize PowerPoint 8 to guide students
through the Organize Your Thoughts
exercise.
C. Utilize PowerPoints 9 – 11 to lead
discussion on financial statements,
concentrating on income statements.
1. Refer to website:
http://www.sec.gov/investor/pubs/begfinstmtguide.htm
2.
Access more information about cost
control.
D. Utilize PowerPoints 12 – 15 to lead
discussion on how financial management
strategies are associated with use of
factors of production.
II. Application – Independent Practice
A. Students repeat the guided practice
activity using potato chips.
B. Students sort items, classifying them as
specific factors of production.
C. Students brainstorm two methods to
increase a business’ profitability by either
increasing revenue, decreasing cost of
sales, or decreasing expenses.
D. Utilize a large, visible surface such as a
wipe board to allow students to write their
responses, sharing them with the class.
Utilize PowerPoint Slide 16 as a guide.
Summary
I. Summary Review Questions
A. Students will answer
review questions
Evaluation
I. Evaluation
A. Students complete an
activity that allows the
instructor to evaluate the
students’ understanding of
interpreting a partial
income statement and
present management
options.
I. Summary Review Questions
A. Ask review questions found on page 5 (see
Summary)
I.
Evaluation
A. Students complete an activity that allows
the instructor to evaluate the students’
understanding of interpreting a partial
income statement and ability to present
management options.
1. Direct students to PowerPoint, pages 17
and 18. Read aloud and discuss for
Copyright © Texas Education Agency, 2011. All rights reserved.
4
clarity.
2. Distribute or display PowerPoint slides 13
– 16. (The Expense section of PowerPoint
16 will not be used in the evaluation
unless the Excel version of the income
statement is distributed.)
3. Distribute Evaluation Rubric.
Extension/Enrichment
I. Extension/Enrichment
A. Students explore other
website activities based on
similar content.
I.
Extension/Enrichment
A. Allow students to explore other websites
activities based on similar content such as
the one listed on page 6.
Copy and paste Multiple Intelligences Graphic in appropriate place in left column.
Verbal
Linguistic
Logical
Mathematical
Visual
Spatial
Musical
Rhythmic
Bodily
Kinesthetic
IntraPersonal
InterPersonal
Naturalist
Existentialist
Application
Guided Practice (LSI Quadrant III):
A.
Learn about factors of production.
1. Direct students to UNC at Chapel Hill LEARN NC online lesson: The four factors of production (see
PowerPoint 2)
2. Print and distribute assignment from website: http://www.learnnc.org/lp/pages/3760
3. Inform students that the lesson has been modified [for simplicity purposes]. Class will use apple juice
instead of Almond Joy. Distribute apply juice boxes.
4. Allow students to first generate their own list.
5. Next, have the students talk about their list.
6. Write the combined list in a visible area; avoid duplicating responses (invite a “scribe” to write down
the responses).
7. Utilize PowerPoints 3 – 7 to guide the students through the factors of production.
8. Timeline is not required.
B. Utilize PowerPoint 8 to guide students through the Organize Your Thoughts exercise.
C. Utilize PowerPoints 9 – 11 to lead discussion on financial statements, concentrating on income statements.
Copyright © Texas Education Agency, 2011. All rights reserved.
5
1.
2.
Refer to website:
http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Identify more information about cost control.
D. Utilize PowerPoints 12 – 15 to lead discussion on how financial management strategies are associated with
use of factors of production.
Independent Practice (LSI Quadrant III):
A. Students repeat the guided practice activity using potato chips.
B. Students sort items, classifying them as specific factors of production.
C. Students brainstorm two methods to increase a business’ profitability by either increasing revenue,
decreasing cost of sales, or decreasing expenses.
D. Utilize a large, visible surface such as a wipe board to allow students to write their responses, sharing
them with the class. Utilize PowerPoint Slide 16 as a guide.
Summary
Review (LSI Quadrants I and IV):
•
•
Question: Name and describe the four factors of production?
Answer: Natural resources, human resources, capital resources, entrepreneurial resources
•
•
Question: What does an income statement reflect?
Answer: An income statement measures how much money a company earned and expenses that
company incurred during a period of time.
•
•
Question: How is a business’ net income calculated?
Answer: Net income equals total revenue less cost of sales and expenses, revenue being greater.
•
•
Question: What is easier to affect - - fixed or variable cost? Why?
Answer: Variable costs are easier to affect. Fixed costs are unchangeable as long as you have the
source. Examples: Rent, depreciation
•
Question: Give three examples of how use of factors of production can positively affect financial
statement management.
Answer: Varies.
Evaluation
•
Informal Assessment (LSI Quadrant III):
Evaluate answers to independent practice.
 Address issues raised in independent practice.
Formal Assessment (LSI Quadrant III, IV):
A. Students complete an activity that allows the instructor to evaluate the students’ understanding of
interpreting a partial income statement and ability to present management options.
1. Direct students to PowerPoint, pages 17 and 18. Read aloud and discuss for clarity.
Copyright © Texas Education Agency, 2011. All rights reserved.
6
2. Distribute or display PowerPoint slides 13 – 16. (The Expense section of PowerPoint 16 will not be
used in the evaluation unless the Excel version of the income statement is distributed.)
3. Distribute Evaluation Rubric.
Extension/Enrichment (LSI Quadrant IV):
Allow students to explore other factors affecting a business’ profits, revenues, and expenses:
- Supply and demand
- Price
- Government controls
- Global marketing
- Scarcity
- Promotional discounts/coupons
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7
My Potato Chip Corporation
2009
2008
Revenue
200,000
250,000
Cost of Goods Sold
75,000
85,000
Gross Profit
Gross Profit %
125,000
63%
165,000
66%
Expenses
Advertising Expense
Salaries Expense
Depreciation Expense
Rent Expense
Supplies Expense
Utilities Expense
Miscellaneous Expense
Total Expenses
11,000
80,000
12,000
25,000
5,000
6,000
500
139,500
10,000
75,000
12,000
25,000
3,500
5,750
200
131,450
Net Income (Loss) Before Taxes
(14,500)
33,550
Units Sold
80,000
100,000
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Evaluation Rubric
Team Members:
Grade: of 100 points
CATEGORY
Content
20
Shows a full understanding of the topic.
18
Shows a good understanding of the topic.
Questions
Actively looks for and shares 3 questions based on scenario.
Actively looks for and Actively looks for and Does not try to present questions shares 1 question shares 2 questions based on the based on scenario.
based on scenario.
scenario.
Problem‐Solving
Actively looks for and Actively looks for and Actively looks for and Does not try to solve suggests 3 solutions to suggests 2 solutions suggests 1 solution to problems presented in the scenario.
problems.
to problems.
problems.
Associating Factors of Solutions cited at least 2‐Solutions cited at Production
3 factors of production least 1‐2 factors of with specificity.
production with specificity.
Quality of Work
Participation
16
Shows a good understanding of parts of the topic.
Solutions cited at least 1 factor of production vaguely.
10
Provides work of the highest quality.
9
8
Provides high quality Provides work that work.
occasionally needs to be checked/redone by other group members to ensure quality.
Each person actively provides useful ideas when participating in the group and in classroom discussion.
Most team members actively provide useful ideas when participating in the group and in classroom discussion.
Half of team members actively provide useful ideas when participating in the group and in classroom discussion.
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Does not seem to understand the topic very well.
No solutions referenced a factor of production.
7
Provides work that usually needs to be checked/redone by others to ensure quality.
One person actively provide useful ideas when participating in the group and in classroom discussion.
10