business
A crispy way
to teach
Resources for Courses
Fixed and variable costs
Overview
The need to understand fixed and variable costs is part of virtually every business specification
and is fundamental to students understanding of area such as profit, break even, contribution
and even issues such as quality.
Below are a number of strategies to deliver concept of fixed and variable costs in a memorable
way.
A crispy way to teach Fixed and Variable Costs
This is one of my favourite ways to introduce the concept of costs. It is highly memorable
meaning students are more likely to be engaged in the activity and therefore understand the
concept more easily.
I start the lesson simply by walking around the room with a large bag of crisps in my hand
(my preferred one is Hula Hoops!). I open the bag and start eating them. Instantly, the students
are hooked into the lesson. I haven’t outlined what the lesson is about (although it is part of
finance) so it creates a little bit of mystery. It is, in the students eyes, unusual.
More often than not, students ask me for some,
so I always oblige. I don’t have an issue with
this as it means they are buying into the activity.
I then simply ask, what goes into making this
bag of crisps? What do Hula Hoops need to
buy in order to make these crisps? This gives
the activity a context.
There are a number of alternatives of how to
develop the activity from here. The first one
is my preferred method.
A crisp way to teach
Fixed and Variable Costs
Resources for Courses
Post It Notes: 1
I split the class into pairs or small groups and give them a pack of post it notes. I then get them
to write down as many different costs as they can think of associated with making a packet of
crisps. They usually come up with about 20 different ones.
We then go round the class and feedback the costs the students have come up with.
I then introduce the concept of fixed and variable costs. Once they understand the concept
I then get the students to sort their post it notes into fixed and variable costs and we then
feedback as a class.
Post it Notes: 2
A variation on the post it notes is for the students to write down all the costs on post it notes
and then come up and stick their post it notes on the board. This is a highly visual method and
also gets the students moving around.
Crisp Template
Attached is a template which can be used for students to fill in as opposed to using post it
notes.
Whichever method you use, I immediately follow it up with a photograph of the actual
ingredients. This develops student’s skills of application and moves them away from always
saying raw materials as a variable cost.
Alternative Products and Scenarios
A big bar of Dairy Milk also makes a great alternative and can be delivered in exactly the
same way.
Asking students to think of the costs involved in running the school is also an excellent scenario
as this allows further analysis later on in looking at how a school can reduce its costs and then
looking at the possible effects this has on learning and exam results.
Crispy Costs
What are the costs involved in making Hula Hoops?
Fixed
Variable