we all rock with a purple today though I could have purple welcome back everybody
you back you back and if you knew welcome it's the CPA strength I'm the
strongest licensed CPA in the state of Florida you see right there yeah Saudi
and strongest latency if you what do you do over here buddy what do you do
I voted me educate and inspire these people you people the viewers i educate
motivate and inspire it's a lot of fun I love it
anyways prefer get into this video I have a certain playlist that I'll show
you over here with this card I have a whole plan as changing lines over here
it's the best playlist in the world guaranteed by me okay
take it up with me anyways after you watch that you might come back I'm going
crazy anyways let me calm down what are we going to do this is number 68 I just
can't believe I'm getting I've done 67 before this one this one we're doing
contribution margin the one and 67 we won were fixed and variable costs so
we're using the same numbers in this one and number 68 and it's contribution
margin what contribution margin is the definition of an excess of sales over
variable costs like we have a sales price of $200 pervert Jennifer's on tax
returns so we have a sales price of $200 per tax return so excess of sales the
sales over variable costs a variable costs are our 50 our one 150 over here
oh do you even see that do you see that say I'm working so working with lights
you see the shadows it's it's getting getting crazy over here right folks
whoo yeah I'm just going to take the hat off halfway through I'll get this
lighting stuff figured out it's you know the show must go on I've got I got to
get good content out first of all so I'm going to keep on
trying to get the good content going out and the the quality is going to step up
so probably incremental that you have that you will notice it so I'm trying to
suck the excess of sales over variable costs you know sales price 200 variable
costs 50 so 150 per unit is the contribution margin and I'm like well
you know usually I have some some Thai usually have the way that I keep it
straight in my head and you know like a little like the trick that helped me or
whatever but I really I don't have one for contribution margin you know if you
can't remember what contribution margin is and you just could have to you know
write it next to the siedler write on your paper every morning when you're
studying and just a contribution margin is you know sales over variable costs or
however you can remember sorry the fixed cost would be like a rent a telephone
bill or a Wi-Fi a we fievel cable someone doesn't change fixed
doesn't change per usage the variable costs only occur or change when you're
selling units like we're selling tax returns or we're preparing tax returns
and every time we prepare taxes her and sells someone for two more dollars it
costs us $50 to go through our tax software so that our variable cost per
unit is $50 anyways once we know once we can figure out that our contribution
margin is 150 dollars so that means every every time we sell one unit every
time we do one taxi term we're making 150 dollars so that's our contribution
margin so once you figure that out once you figure out our contribution margin
150 bucks then you know it's six to six hundred dollars is the fixed cost so
that's what we need to cover so you can find out a couple you know a couple
things your break-even point you can have target like how much you hope to
make or all kind all kinds of formulas and
and ratios are derived from the contribution margin so really that's why
I picked this one to show you after we did definitely one over fixed and
variable cost or did the graph I hope you like the graph I thought it was cool
I want to do contribution margins it's a very important ratio for you know it's
just behind a fixed in a variable cost is the contribution margin so I went all
the way around anyways we're going to do we rated contribution margin and then
then the unit unit contribution margin so this is just the regular contribution
margin in the book both in self 10 10 units so I'm selling 10 tax returns all
right 10 year tax returns to doing 10 tax returns uh-huh I'm selling each each
tax return for $200 right and every sets of sales per unit the variable cost per
unit is $50 because that's how much the tax software costs per tax return the
fixed cost is 6 are dollars that's my rent it's like a phone and my Kate like
my Wi-Fi my we fee doesn't matter how much I use per per month it's going to
stay the same let's say let's start to figure out with
these with these facts here 10 units sold 10 tax returns sold $200 a piece
for sale $50 variable cost per unit for tax return and $600 for fixed costs
let's give the contribution margin so total sale 10 units times $200 is $2,000
in total sales minus minus our variable costs and that's going to be our
contribution margin that's going to be our profit before the fixed costs right
its profit before the fixed cost I was saying earlier in the video I just
caught that that I would say it's the profit it's not the property it's a
profit before the trix costs I guess that's why they don't call it profits
when I call it contribution margin because it's your margin that you have
to contribute to maybe I don't know so the variable costs protecting for 10
tax returns $50 each is $500 so you could subtract $500 from 2000 year
$1,500 that's the contrary the contribution
margin you could you have to 10 units because you have 10 you sold 10 units
then the contribution margin see 200 minus 50 for one is 150 to get your unit
price right there and that's another unit contribution margin up another
factoring which I like a little bit better but anyways sales minus variable
costs sales over variable cost that's a contribution margin 2,000 minus 500 is
1,500 which you could also get a per unit because partying is 200 minus 50
150 per unit but for the contribution margin and the total here you have 1500
dollars profit for 10 10 units for our contribution margin so profit before
fixed then you have then you have your fixed cost of six hundred nine hundred
dollars profit so that's contribution margin but now
let's oh let's go over here to the Yi let's go over here to the unit
contribution margin now it's just the unit contribution margin just
intuitively makes more sense to me I think you should see that I'm again
making 150 a pop here I instead of doing all instead of doing all this I would
say almost per unit of my making grants where no Li 150 per unit before my
shirts cost hey guys I just want to know that number so I
would I would just paint I would just take oh the sales price per unit 200
variable cost per unit minus 50 100 250 and then I'd say how many sales do we do
ten hundred fifty times ten fifteen hundred what I would like to see this
the contribution margin so I would know that hey 150 out of four of these and
and I can get my break-even point anyways I thought the I thought the air
was on or something but I'm getting extremely sweaty now and I'm getting
hard to think and everything all of that such anyways I hope you enjoyed this one
a contribution margin I hope I'd see you in the next video
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next one and of course of course of course stay positive okay also yes this
is a hater free zone Gator Freeman we got time for that okay Wayne turn
associate on nobody alright we're trying to uplift and promote everybody alright
well everybody's are doing good we don't we don't promote haters or main people
or anyways I'll see you next time don't
they my brother back in jail and I hate those
pain I'm real long ago you're dead okay yo que sabe no game when i was young i
was coca and it's like okay