Aloha and welcome to Stan the Energy Man here on ThinkTek Hawaii, Stan Osserman coming to you from my back deck on my cabin in Hamakua, Hawaii, well actually I'm still in Kailua but I wish I was on my back deck of my cabin in Hamakua, Hawaii, but it's a beautiful view and a nice quiet place all I can hear is birds and turkeys and cows and it's kind of nice to get away to that kind of world when our world's going crazy. We'll be talking about that crazy world with our guests today but before we get into that next week Tuesday besides a great Stan the Energy Man show we're going to have I'm also hosting a dialogue or a program for Renew Rebuild Hawaii. So if you go to the Renew Rebuild Hawaii website and you want to hear a discussion from some folks that have experience in microgrids we're talking about how microgrids can help Hawaii get through a disaster like a hurricane. So that's on Renew Rebuild Hawaii and it's right before my show on ThinkTech so you could roll right from that one into watching Stan Energy Man right afterwards. But for today we've got a really I think a really good topic it's when we've talked a little bit about in the last couple shows with Dan going but we're going to really get into a little bit more of the nuts and bolts and the last show we did together we talked about our predictions for the economy and for oil and things like that and you know it may have sound kind of like we were looking at a crystal ball but Dan doesn't use crystal balls I don't use crystal balls we just kind of do a lot of homework and figure these things out so Dan's going to explain in nuts and bolts terms what we're really looking at in the energy world right now because a lot of people are still living in the days when OPEC and big countries just kind of manipulated stuff for their own economic you know advantage but the landscape has changed and some of the you know trying to twist arms to get people to do stuff doesn't work anymore so Dan's going to tell us a little bit about what's going on in the real world so Dan welcome. Thanks Dan for let me back on so for everybody out there listening to this this news guest that we're at the center and talk about what I'm going to do is I'm going to sit down I'm going to put lay down some pieces on the table and show you how the puzzle fits together and show you what Stan and I've been looking at I've been looking at for probably more than a year and I know ever since I've been sending out emails to Stan he's been chewing on the things I've been putting out and I think Stan's finally realized like a lot of people that received my newsletter that wait a minute there's a little bit more map and upwards and substance what's going on so if I can just get him put slide number one up there and that's just another pitch for the company electron power technology and we'll quickly go into slide number two. Okay so that's from a world oil and that says falling US crude supply begins to impact global oil prices so what's going on here well this story starts back in the year 2014 when well oil had been a hundred dollars a barrel average between 2008 and 2014 and in the year 2004 the 2014 the oil the world oil markets had crashed and basically what it was it was a combination of the shell drillers here in the United States were producing a lot of oil and they collided with a country called Saudi Arabia okay and between Saudi Arabia and those shell drillers they effectively kept the average price oil down around $50 a barrel between 2014 and 2020 now part of this it's important has to something called the break even cost of producing oil for the shell drillers here in the United States that's roughly about $55 per barrel right and if you're keeping oil down at 50 bucks that means they're either losing $5 per barrel or they're barely make be able to pay their bills now in the case of Saudi Arabia most the countries in the Middle East Saudi Arabia's break evil on what break even on oil production is actually $80 per barrel and most the countries in the Middle East have the same break even that means they're not making any money selling oil at that price they're they're they're losing money now so if you say $50 minus 80 that means that for six years Saudi Arabia was losing $30 in every barrel of oil there that they were selling now there are two players out here that have a really really low product break even production level one of them happens to be Russia Russia's break even is actually $15 per barrel you throw in Russian taxes so it's about $25 per barrel the other one is actually Iran Iran's break even is actually $20 per barrel yet in Iranian taxes it's 30 bucks now Iran have been kept from the international market for selling oil mainly because the trade sanctions and the other reason is because they were trapped inside the Persian Gulf that all changed this year when that will pipeline was opened up that open up near the the start of the Persian Gulf and ended up around the the straits there up near the Pakistani port so that allowed start allowing the rain this is so crude oil on the international market down and built that pipeline by the way down I'm sorry we built that pipeline Russia yeah that was Russia grass gas from to built that so last April 20th the oil markets crashed and the price of oil went to minus $37 a barrel the reason why that happened is because when we went into lockdown from COVID we are all were trapped at home not driving our cars we weren't consuming oil and there are a lot of people out there that had contracts for oil or oil that already been on on big oil tankers and had to get rid of the oil and since you can't just let an oil tanker sit out in the ocean because the shipping company is going to charge you money for that well sitting in their tanks so people actually pay oil people actually paid other people please take my oil off my hands and it was they were paying you to take the oil for $37 a barrel not you weren't buying it they were actually paying you to take it and we were running out of storage places to actually store this oil and but that's why the oil markets crash now whenever that crash happened a lot of the small business people here who had been holding on for good six years they started going back in the droughts a lot of small medium little business drillers here in the United States all replaced going back now when it comes to Saudi Arabia sovereign nations can borrow a lot of money trillions of dollars so the Saudis are deeply in debt today now a lot of their shale drillers share in the United States have gone bankrupt because that crash that happened that now let's go to page number three okay so what that what that page there is just drill rich drilling set we're drilling for sale the top line there is the year 2019 2019 or 2020 I can't see it anyway the bottom line is the year 2021 so in 2019 the top the maximum production the United States was producing is about 13 million barrels a day four million barrels of that was traditional oil wells the remaining eight million barrels with shale and that was with 1600 dregs drilling oil you know throughout the year now whenever the crash happened right now our current drill fleet is roughly about 500 wells that were that were drilling right now now on top of that of course we've changed governments we went from the current administration to the Biden administration the Biden administration it is not as friendly to the oil folks it's probably the easiest way to say it so what they did is they turned around and they scrapped 1,100 drilling rates I mean sent them off to be melted down for scrap steel so the Biden administration today is wanting these drillers to go and drill more oil to drop the price oil but we physically don't have the rigs to actually go out do the drill so now one of the aspects of this keep in mind that the United States our country we have an oil addiction we burn 20 million barrels of oil a day and actually at the latest report I was reading today that it's gone up to 22 million barrels of oil per day so as far as energy independent you do the math 13 minus 20 million is still seven million barrels we're still importing a lot of oil every day so so let me interrupt too while you change slides that so as we we have the price of oil fairly low and then we had the bankruptcies and stuff because all of a sudden the demand for oil was low and we had surplus oil now the demand for oil is ramping up but we don't have the infrastructure the resources to pull back online and just react like that to produce oil again in our country yeah we we don't we physically don't have the drill rigs they just don't you know they're not here and if you ask the the drillers right now one of they can ramp up production they're talking about next year and you'll say why do I got to wait till next year well because it maybe we'll build enough rigs between now and then but we're not going to be able to build a thousand rigs I mean anybody licking that will say you know who know between now and next spring I don't know how how many we're going to be able to build and that goes back to with all these different supply shortages so the other thing is is when these guys start drilling you won't see that oil for six months I mean it takes six months to bring it online and if we're not drilling it today we're definitely not drilling it today we don't have the rigs maybe next year we'll start ramping it up but as soon as you'll see any relief from the United States you know for more oil here in the United States drop some of these fuel prices is probably 2023 and it's just because we just don't have the drill rigs to do and and roughly how many of how much percentage of the oil production in the United States is I don't know if you'd call it small business but not your big mega drillers like Shell or you know are they are there a lot of 80 percent yeah 80 80 percent small medium businesses so 80 percent of them are small medium businesses and who was hit the hardest by all this jockeying around with COVID and no driving and then all of a sudden we're driving again and we're flying airplanes again and and you know they're the ones the ones who went bankrupt were basically the heart and core of our production capability what with a lot of the public doesn't realize about large corporations large corporations are really financing them so if you're a large integrator we'll come to like Exxon you have a lot of subcontractors you've got drillers people that provide all different kinds of services essentially Exxon the top of Exxon is really just a financing one and if you go to for example a General Motors or a Ford you'll find out that General Motors and Ford are made up of all these tiny little companies that make all these small little components and really all Ford and GM do is they just assemble all the small components to build a car so almost all industry in the United States is built that way and it has to do with because that's the most adaptable structure it's just so happens in this case we've got like I said we had that crash in the oil market that pushed a lot of these companies that have been under distress for about six years and then on top of that the regime the government we have in there right now is not friendly to the hydrocarb business so I can get you go to fly number four okay so that picture right there it's kind of a busy one but it's got a couple key things so it says Cushing, Oklahoma so since we're not producing as much of that crude oil the shell oil the oil that we produce in the United States is a oil it's called sweet means it's low in sulfur content and the main export terminal is a place called Cushing, Oklahoma they send the oil there then eventually it goes down to Corpus Christi or down the gulf to be loaded on supertakers and that there right shows what says 27 million barrels it's actually 25 but the point is the United States we could burn through Cushing, Oklahoma in a day and a half but we're not exporting oil right now we haven't been exporting oil for probably the last three or four months the other important column there is something called distillates okay yet crude oil distillates gasoline of course Cushing not distillates what is that that is diesel and jet fuel our economy runs on diesel okay so that there is telling me now the top red line that's the maximum amount of storage we have and you know that 125 is telling me 125 million barrels of diesel and or jet fuel they don't break it out to just say distillates so I don't know what that is but that tells me right now the amount of diesel fuel we have here in the United States as well now that's the fuel that powers that semi-truck that delivers all those goods to Walmart that's also the same fuel that powers the front loader that digs up the coal dump trucks locomotive trains etc okay that is the heart of the economy so but yeah we're not we're not exporting enough fuel if I can get you to go slide into five and that there just is another confirmation that we're not refining enough crude oil propane when you're at a refinery they have what's called a fractionary tower the top of that it's like a big steel basically the top of that big fractionary tower is a big pipe coming on the top of it and what comes out of there is propane and butane and right now our levels are propane or critically low so if you live out in the country and you have a bot propane ad or if you already bought propane you know the propane's getting very expensive just because our levels of propane are at a critically low level that's being noted there by the Department of Energy they've noticed that is at a critical critical level right now but that's telling me we're not refining enough crude oil to make gasoline and diesel now as to the precise cause of that I'm not exactly sure but I'm guessing it has to do with some kind of a policy change that happened in Washington DC okay if I can get you also you mentioned that um we have or if we could import more oil would we be making diesel and and gasoline and aviation fuel out of oil that's coming out just oil that's coming out of the middle Middle East or is we do make we do make we do make fuel out of the oil that comes out of the middle east is it the same quality though that and that's what we're going to go into next we're going to talk about the quality issue okay and and this goes back to and I just remember the type of oil that we that we produce here in the United States is low in sulfur content so that means it's easy to refine into diesel and gasoline and jet fuel and stuff like that but a lot of the other oil like we're going to talk about coming out of the Middle East is what we call high sulfur content oil it's what we call sour and you and I are going to have a discussion about what's going on on Saudi Arabia what's causing but but anyway the United States us not producing that light crude oil that really grew good it's actually pretty good crude oil and we're not exporting it right now and that's having an impact on the world's economy a very negative impact and it's it's causing repercussions and things like for example natural gas a lot of the high natural gas prices you see in europe and asia has actually caused by this oil and when i put all the pieces together you're like boy this is like the perfect storm and that's what we're going to discuss so i can get you to go to page number six okay what that says right there is g china is struck struck with a diesel shortage so and understand this is this diesel shortage is actually tied to this whole natural gas shortage issue and europe is a little more complex is that's that's a he's dealing they're dealing with latin reputant and russia but china they're actually struck by a twist and it has to do with shipping okay now where the shipping comes in and it impacts the lng shipping so for this diesel shortage inside of china has to do with well first of all since we're not exporting oil in the united states they're having to use a lot more oil out of the middle east okay and a lot more oil out of saudi arabia and that is a type of oil that's heavy and sulfur and the next page we're going to talk about what what that means but the big thing that was impacting a lot of this was three years ago there was something called the im o 20 plump and that is a fuel standard for the large cargo container ships now three years ago a lot of the big car container ships the super tangers they burned what's called bunker if you want to know what bunker is and i don't stand those old bunkers there's a joke in the business and what that joke is you take a 55 gallon barrel you drape a sheet over it and you pour crude through it that's bunker pretty close it's pretty raw stuff well literally the bottom of the barrel literally the bottom of the barrel so and it's pretty nasty burning stuff and that they in those car container ships there's a diesel engine there that is huge it's five stories tall so some of the largest engines in the world right but they burned this bunker in these big giant ships well anyway a number of years ago they started having problems with a lot of the countries including china or these countries you could come up to near the border of their shore and they make you shut down the engine they come up with tugbo to drag you in they wouldn't let you run that engine all the way up to the port okay and it had to do with just the belching pollution coming out of that because they're burning that high sulfur bunker fuel they required you to buy their electricity all your import because they don't want you polluting their their countryside with your bunker oil yeah and understand even china was doing so with the international maritime organization the iml came up with as they came up with a fuel standard now they floated it in 2008 it was proved in it into international law in 2016 so notice how i'm saying this international law the coast guard when they see your ship they have this uv camera and they'll take a picture of your ship and they can tell how much sulfur is coming out of the stack and there's too much crap coming out of that thing they'll do a heave toe jump on board ship they might take your captain in a custody but they'll arrest your ship according to international law right and i've never been a police officer i know you've done that done that stuff stan but i'm pretty sure they'll make your day pretty ugly bad day for burning that stuff so the imo came up with this fuel standard it took effect january 1st of 2020 so the big card container ships they had three choices choice number one put a scrubber in that ship which is a 20 20 million dollar mod per ship not only that but you then you had this hazmat issue you got to deal with every couple years because of that scrub option number two convert over to liquefied natural gas okay another 20 million dollar mod per ship but now you have to worry about do all the terminals have refueling liquefied natural gas refueling for your ship so guess what option they chose stan option number three nothing diesel oh yeah diesel they chose to burn diesel that's an easy conversion yeah so that is the same diesel that's in that 18-wheeler class a semi truck the front loader the locomotive the dump truck that everybody else burned so they increased the demand for diesel by almost double so they doubled the demand for diesel fuel but nobody bothered to upgrade the refinery capacity so coupled on top of this the united states are the amount of oil we're exporting has dropped something like two to three million barrels per day we're not exporting of that really good nice sweet stuff that was easy to refine in the diesel so so anyway uh what here's one of the effects of this hat so one of the things stan and we're talking about so four years three years ago if you were going to ship a 40-foot car container from asia to the united states okay it would cost you about four thousand dollars to move that container stan was the latest price today closer to 20 000 yeah yeah it's gone up five times that's the fuel that cost is affected a lot of things let me give you some examples if i'm shipping product from say china to the united states more likely that product is going to be valuable product like flat panel screens computers stuff like that so there might be a couple million dollars worth of hardware in that 40-foot car container so 20 000 that's a you know that makes sense but here's the question we in the united states what do we export what do we export yeah what do we export that's worth 20 000 for 40-foot car container got me on that one yeah well so does everybody else because out at the port of long eastern los angeles that's really what the pile is there's a pile of empty containers and nobody's exporting anything and so in asia they have assurances of containers because none of them are coming back because we just don't have anything that economically makes sense to ship back to asia 20 000 per container right so it's it's turned in that so this whole thing is snarled by that whole fuel thing that's what i'm getting at okay so and that's also complicated the liquefied natural gas situation overseas okay so if i can get you go to page number seven page number seven this is where everything collides so that is what's called a block engineering diagram it's what we engineers use and the key to that little thing well you don't have to know a whole bunch of technical stuff about really all you need to do is you take that thing you print it out you pull out your little yellow hind leg hot your yellow highlighter and highlight everything on there that says h2 and you're going to figure out your oil refinery they use a lot of hydrogen that that order from and actually it's blue hydrogen they make it from natural gas you say dan what the heck they use all the hydro for that oil refinery removing sulfur from the prop now so one of the you know so here in the u.s. we have that low sulfur crude oil in the middle east they get a lot of the high sulfur crude oil and that's coming out of Saudi Arabia so a lot of the natural gas right now because they're using that high sulfur rate crude oil in the middle east right through the refineries in Asia that's Japan Korea China etc and even including Europe they're consuming a lot of natural gas just refining that heavy sour crude oil in a diesel gasoline and jet fuel and that's caused a shortage of natural gas liquefied natural gas uh so the number one consumer of hydrogen in the world happens to be an oil refinery and that's one of those old deal nobody I mean everybody talks about most of the hydrogen is blue hydrogen but they won't tell you what it's used for who's using well it's an oil refinery the number two on that list is any place that makes hand hydrism when you fertilize okay so that's where the liquefied natural gas the middle east have basically collided with that heavy sour because we're not exporting that light sweet now on top of that something that came out today and it's something I've known about for quite a long time but you don't come out and say this but today Saudi Arabia finally admitted that they're not able to produce as much oil as they did in the past and what I mean by that is at best Saudi Arabia is probably able to only produce about eight million barrels of oil a day the other thing about that crude is it's very high and sulfur now the reason why I can say I suspected it is simply this when an oil deposit when you start hitting near the bottom the stuff in the bottom well basically it's asphalt you know that's the stuff for near higher the molecules get really long and sticky and it's full of sulfur so if you've measured any of the crude oil coming out of the Middle East out of Saudi Arabia over the last probably 15 years you've noticed the sulfur levels are just steadily going up and that tells you that you know that the time is coming you know it's probably going to have immediately the production there in Saudi Arabia is slowly dropping up so we're just going to have the world is looking into the mouth of just plain less crude oil not only that isn't less crude oil but it's less quality crude oil that crude oil will consume ever more amounts of natural gas to turn it into fuels so if you want to know how severe that shortage is becoming like here in the United States if you looked at some of the slides in pollprice.com it'll show natural gas here in the United States is roughly like $5.50 per million BTUs or something like that I was looking at the contract in Japan the spot market price in Japan right now the Russians have opened up the spigot they're dumping a little bit more gas into the into the Japanese Korean area right but even then a million BTUs of liquefied natural gas in South Korea and Japan right now is $30 per million BTUs England right now it looks like they haven't released it but it's still about $42 per million BTUs in Europe okay and some of that is tied back to the Germans need to get off their tail in and approve Vladimir Putin's Nord Stream 2 pipeline to pump more gas in Europe and they're pointing a lot of fingers at this guy but when I look at the capacity he's got he's got three running pipelines right now he's pumping up max capacity okay they're saying he's not cranking enough gas and I'm looking at the numbers from the system he's pumping max right now so it's kind of annoying they're pointing fingers and making that the big bad guy when this isn't his doing it's just well I mean just to be honest this is plain poor planning on their part you know and it goes back to what Stan and I knew about we need to go to renewables but you've got to have some thought about how you do this and you have to plan this thing and if you don't plan it out and you just worry about politics this is a truck that will run you over and it's merciless so this is where all those things come together and it's the perfect storm and not only that if you notice what I talked about ammonia ammonia anarismonia China stopped exporting and ammonia and urea that's fertilizer fertilizer that affects foods that means your food prices are going high just so you and this is all tied back to because you know we're not drilling enough of that show well providing that low sulfur crude and now it's impacted liquefied natural gas and natural gas it's even affecting natural gas here now we got lucky right now here in the united states believe or not shanae and some of the big lng exporters they're not able to export as much gas because of some technology so i can get you go to the next page page number eight that's steel it's already impacted steel production right there's a crash in the world so the steel market because of this issue with uh with liquefied natural with natural gas the energy price is going high and if i can get you to page number nine and this is uh coal running out of coal here in the united states and what that has to do with something i already talked with stan about and that is if you're burning brown coal in your coal far power plant and it's late night as brown coal's less than 40 percent carbon content remember that front loader that digs up the coal it burns diesel your dump truck burns diesel your locomotive tree burns diesel the diesel price will make brown coal uneconomical which means you can't burn that stuff in your power plant you can't do it economically and what will drive that out of business is simply just the price of diesel so the bigger story here about this whole story the bigger picture and it's something we're going to have to address and it'll take a little time for the powers to be to sort of piece all these pieces together but really what this means is we need to diversify out of some critical elements that are using diesel now one of the possibilities out there i know kenworth has a hydrogen powered semi truck they did a lot of work with with toita on a hydrogen powered kenworth class 8 semi truck right and i don't know what anybody's doing unlike front motors and that type of equipment it's a lot easier to move that equipment onto hot and alternative fuel like hydrogen then going back trying to retrofit all those cargo container ships and and super tankers okay so but we as a country i mean you may not understand what i'm saying hopefully people play this video a couple more times and chew on what i'm telling them but but but eventually eventually that's the path we're probably more likely and more likely that's the path we're going to have to work in so that's about all i've got there stan well yeah and we're running complete in the fact we're running a little bit over time but um i thought it was important to let you wrap up there and show that coal is impacted steel is impacted all transportation getting goods and services to and from ports and places where they're sold is impacted fertilizer fertilizer for growing crops is impacted equipment for raising crops and dealing with it's all impacted so if you think that inflation is temporary here and you think how much energy costs impact inflation we're in for a long haul here and that was kind of the main point of this whole show so Dan i'd like to thank you for being on and taking us through that that maze i'm sure a lot of people haven't really thought about all those implications and the price of oil and and the impacts of trying to decarbonize the world in a week um it just can't be done you've got to really plan it out you got to think it out you got to do it the right steps to make it work so thanks for your uh your your detailed explanation today Dan and i hope that so some people will look through this a few times especially policymakers and begin to understand what they're doing when they when they come to some of these conclusions so until next week let's say aloha to Dan and we'll have him back on for sure because he and i talk about a lot of stuff together but till next week Tuesday stan energy man signing off aloha thanks stan


Hello everyone welcome to another Narc Survival Live video but this is no ordinary video. This is the five year anniversary video. Yes I first started doing this five years ago, August the 16th 2018 and of course it is now August the 16th 2023. So yes I've been doing this five years and believe it or not I am just as enthusiastic if not more than I was when I started this five years ago. So I don't see any signs of me stopping this anytime soon. I am going to continue with it. I do enjoy it. I love helping people and spreading this information video down below by giving it a thumbs up and now on to the topic. The narcissist is miserable without you. I don't know for many of you that may be quite hard to believe. You may wonder how can they be miserable without you. Because you've gone on to their social media you've seen all of these pictures and videos and they look so happy without you. You see these four smiles this fake laughter they're web their new supply they go into all of these places nice restaurants they're holding hands walking on the beach they're doing all of these typical romantic things and they're giving the new supply everything that you wanted from them.  They're actually very miserable without you. And this is a fact because there is one thing we all have in common as human beings and it is just the way that we are designed. Yes we may have empathy narcissists may lack empathy but that does not mean that they don't have any emotions that does not mean that they do not suffer just as if you were to do it if you were to do the very things that they did to you you would feel how they feel and how they really feel is not good and in fact it's potentially a hundred times worse for them because of how they portray the false image they don't accept the shame they run from it they don't want to deal with it they don't want to process the emotions but you cannot run from that you cannot run from that it will catch up to you. They can try to fight it they can try to deflect it away they can shift the blame onto you they can start smear campaigns and stupid networks they can do all of these things but that does not make a difference the shame will continue to build up inside of them and they will not feel good about it. I can't really describe exactly how they might feel but I know it's not good I know it's really bad and I can look back from my own experiences where I did things that I wasn't proud of and I look back and I think okay maybe I wish I didn't do that maybe that was wrong because I do have empathy and compassion for other people I can feel other people's pain so of course there are times in my life many times where I have felt a lot of guilt a lot of shame as a result of my own actions and of course at times I took full responsibility for things that maybe I shouldn't have although I did play a part in it and we should always take responsibility for where we find ourselves because that is the only way that we can fix it that is the only way that we can process the emotions that come along with it but if you just imagine if you just think back and remember one of the worst things you ever did in your life something really bad and you know it was wrong you know that you shouldn't have done that remember how that made you feel you felt the shame you felt the insecurity it didn't feel right to you and for narcissists you have to multiply that shame by a hundred times and then you will understand how they feel every day because these types of people they can never really be happy they don't get that sense of well-being that we get just from doing nothing just from being ourselves just from talking connecting with other people being authentic being authentic being real no they don't get that at all they don't get to experience that and you should already know that when you were in a relationship with them you could not connect to them emotionally it's like there was a blockage between you and them you couldn't understand them and they couldn't understand you and I believe that a big part of that is because of the shame they run from the shame when in fact the very thing that you need to do is practice acceptance radical acceptance and just say okay this happened there's nothing we can do about it now it's taken place what are we going to do now how are we going to move past it if reality and the truth is so important and the future is so important then what are we going to do now and that is the mindset that you need to have especially with the things that they did to you you need to have that mindset that's I don't know I'm just going to open my umbrella it's raining pretty heavy down there I think it's about to come over this way look at that you can see the rain just there and it's not raining on me yet oh wait it's coming yeah it's got you know it took a few seconds to get to me as you can see it's you know there's something about it I think it's quite beautiful in the rain yeah I like this part because you know I do come here quite often but yeah that's really what we have to do is practice radical acceptance feel the fear feel the shame and do it anyway yes it's going to hurt yes you're going to feel pain yes you're going to feel a knot in your stomach but you know what that's much better than living a life full of misery and pain living a life when you were you were where you will never be happy it's much better than doing that you have to accept it and let it go you have to accept it and let it go and I'm not justifying what you've experienced what was done to you no I'm not justifying that at all but the more that you label it and identify with it it's only going to control you for the rest of your life remember as William Shakespeare said nothing in this life is good or bad but thinking makes it so and I'm not saying that what happened to you was not bad but you have to reframe it otherwise you're never going to be able to let it go you're never going to be able to move past it and it's going to forever control you and weigh you down and just look at it that's exactly what narcissists do that's exactly what narcissists do and that is why they'll never be happy they will never get to experience real love intimacy a deep emotional connection with anyone they will never get to experience any of that and that is why that is why and I can tell you earlier in my life there were times when I always felt miserable I felt a lot of shame you know it's only the last few years since I started studying narcissism as I had my spiritual awakening that is when a lot of suppressed memories started to come up and I would just accept them and let them go not even label them you don't have to look around and see the perpetrators as these evil demons monsters because if you do that you're just giving them power over you they're just further going to control you and you're going to be further victimized it's not going to do any good for you this is the secret to true happiness it's accepting it and letting it go letting go of the resistance because what you resist persists which means that it's never going to end it's always going to be like that and yeah what this means is that narcissists they will always be miserable of course if they did just accept it and they let go of the resistance by doing that yes then they would finally be able to experience real love real intimacy a real connection that all comes from letting go of the resistance but I think they hold on because deep down they believe that they're never going to experience that and the crazy part about it is by just accepting those feelings and emotions of never being able to experience it that is the very thing that would lead them to it as crazy as it sounds that is the truth if they would just let go of this idea of them not being good enough of them being unlovable and if they just looked at themselves in the mirror and said you know what maybe I'm not anything special maybe I am nothing so what let's start now let's try to be better let's try to be something more let's probably see I am soaked I am soaked you know what the crazy thing is I already knew it was going to rain I saw the clouds coming over here at the Thunder I came here to do a video I thought if it rains it rains who cares it'll make it more interesting for this five year anniversary video but that's just so you know this is a perfect example just let things be let things happen take place naturally yes you might get wet it may feel uncomfortable but that's okay feel the discomfort feel the pain that's something that you should definitely do it will be good for you then you will be able to go past it but Master says no they're not going to do that and I know it's crazy because yes as I said all they have to do is just let go of that resistance and just look at themselves and just say okay maybe I am nothing maybe I am no good that's really a good starting point for anyone because once you accept that that should be a motivation okay let's be better but when you have this ego you're better than everyone you can't grow without mindset you're just going to stay this life that's no good but Master says why do they do this why they let go why do they hold on to the resistance of course the reason why is because yes to be fair they have experienced some things that led them to be very paranoid and unable to trust people yes that may be true they made them think that people are out to get them so they have to get them first made them think that the world is unfair to them the world is not a safe place so you have to cheat you have to lie you have to steal you have to do all of these things you have to deceive because they have this mindset that they're ahead of everything they're smarter the more intelligent they're better they're more ready than everyone else and they have to put themselves in that position but they're always badly for these reasons that's why they will change because they don't want to do without trying to discover they're highly advised you to forgive yourself and forgive the narcissist it doesn't matter what they've done it doesn't matter how bad it was this is about you this is about you freeing yourself moving on growing and becoming the best version of yourself you can't become yourself if you're holding on to the past you're forever going to be stuck there so you have to let it go many of you many of us have done that i've done that myself of course many times i have processed my childhood traumas that doesn't mean that that it doesn't come up sometimes that i still feel some mild discomfort no of course not but at this point i'm able to work through it i feel it and then i let it go that's what you have to do to heal and when you do that you well feel happy you really well you'll feel good about yourself 99% of the time and often for no reason at all for no reason at all even if you don't have anything or anyone you can still feel good you can still feel happy that doesn't mean that you'll want to spend the rest of your life alone of course not when you're happy you decide to make other people happy too so yeah it's all around a very good thing for society when people are happy they're more productive they're more compassionate they're just better people all around so yeah this is the problem of the narcissist they can't let go of the resistance for you i advise you to give people what they need that's how you let go of the resistance rising back maybe you too because that's it for a lot of people they look at it like they may want something but then they feel like it's something they could never obtain so then they push it away or they bury it beneath them when the reality is that if you just let go of the resistance and you accept it you accept that you want it that you let it go that is the best chance you'll ever get manifest in it into reality what's blocking these things from coming into fruition is your own resistance and same with us as it's their own resistance of course that's all they ever wanted just something like anyone they wanted it a lot and they resisted it they buried it beneath them because they were told that they are unlovable that's the message that they got in their childhood and they resisted those emotions that's not what you should do of course there's plenty of things that my life that have told me you're unlovable you're useless you'll never be anything you're a pile of shit so all of this of course there's plenty of things in my life that have told me that I just had to accept it instead of by pushing it away I just thought okay what if it's true what if I am that I want what do we do now of course what I can do is accept it and then just try to be the best person and look at it like because it's the truth the person that you are today is an article that said that every cell in our entire body regenerates after three years you will feel much happier you will feel much better about yourself and you will have more to give to other people the people you care about this is why unfortunately yes narcissists they will always be measured make them just go to them and tap this acceptance focus on moving forward in your own life people have to have to focus on that you can't change other people so yeah that's a message for this five-year anniversary video of nark survivor thank you all for joining me if it was helpful please give it a thumbs up down below let me know your thoughts in the comment section subscribe share the video when I'm coaching you can book on my website it is narksurvivor.co.uk and check out my instagram as well nark survivor youtube and instagram new pictures and videos of my travels every day on there thank you all for joining me and I will talk to you soon


Hey, this is Brett, and this 2019 Ram 2500 Crew Cab Short Box, Bighorn Level 1 Sport Edition is stock number 13370Z. I am here at Summit Automotive in Fond du Lac, Wisconsin, near New and used heavy-duty truck and Ram headquarters. This 2019 Ram 2500 has the 6.4-liter V8 Hemi engine, 410 horsepower, it's paired up with the 8-speed automatic transmission. This truck in tow up to 14,240 pounds and has a max payload of 2,928 pounds. I found that information on Ram's tow guide website, which I will link in the description below. I'm going to go all the way around on this truck inside underneath, start it up and take a look under the hood to give you the most accurate representation of the vehicle as possible. This truck has also been fully safety and inspected by our service shop, has a fresh oil and filter change, all the fluids have been checked and topped off, and it is 100% ready to go. Billet Silver is the color, and if you have the HD capabilities on your computer tablet, smartphone or television, turn them on right now because I shoot all my videos in 4K. And it is the best way for you to check out the quality, condition options and cleanliness of the vehicle before seen in person. As you go down this driver's side, the box is in excellent shape. The cab and doors are in fantastic condition as well, and in senior major dents or dings on there. Front fender is in very nice condition as well, didn't see any dents or dings. And if you liked the video, you can subscribe to my YouTube channel, which is youtube.com slash summit auto. Click the bell notifications to get updates on the videos I do each and every day. And if this isn't the truck for you, you might just find your next one there. It comes with the polished aluminum rims. These are 18-inch rims and it has firestone transforced HT tires. These are LT 275 70R 18s. And I would say they have probably about 70% of the tread left on them. Frame and underbody is in very nice condition. Front fender, once again, no dents or dings. This one does have the LED headlamps and the LED running lights, as well as the LED fog lamps. I'm going to turn all of them on at the end of the video, so definitely stay tuned for that. Front bumper is in really nice shape. It does come with the front bumper parking sensors. You get the chrome-trimmed ram grille. Has the front camera on there. It actually has the 360 cam on this truck. This thing's really optioned out nicely for a level one. The hood is in fantastic condition. Didn't see any dents or dings and it does come with the cab lights up top. Passenger side front fender, very nice shape as well. And the passenger side rim, no major scuffs or scrapes on there. Now as you go down this side of this 2019 Ram 2500, take note of how clean the body is, how reflective and mirror-like the paint is. I take these HD videos, so if you are far away or even if you're close by and you just cannot make the trip down, but you're still interested in purchasing the vehicle, you can see the truck, hear the truck, and have confidence in the vehicle that you're looking at before you even get here. So when you do get here, there's absolutely no surprises and you can make a smart and informed buying decision from wherever you're at. If this video helps you make that buying decision, let your salesman know that you saw the video, that it was helpful and that Brett sent you. Really nice thing on this truck is that it comes with the wheel-to-wheel sidesteps. They go all the way up to the bed so that you can get into the bed easily. Back rims in pretty nice shape. Back tires have just about as much tread as the front tires, maybe just a hair bit less, but it's still at least 50% of the tread on those tires back here. Frame and underbody is in really nice condition, has all the remaining factory exhaust. It's like that all the way underneath. And those step bars are really nice. Sport package gives you the sport sticker on the side. If you didn't like those, you can always take those off. Those are just stickers. And you get the painted rear bumper, painted rear and front bumper, I should say. Parking sensors on the back, full towing package, which includes a receiver hitch four pin and seven pin wiring. Tailgate is in fantastic condition as well. Didn't see any denser dings in there. It does have the LED tail lamps too. And you get an undercover truck hero tonneau cover on here. That is locked. There you go. Spray and bed liner, fifth wheel and goose neck prep package. Bed's in really nice shape. Comes with seven pin wiring back here and side box tie downs. That bed liner goes onto the tailgate, which is a very nice thing to have. And that shuts solidly. See the shocks are doing a nice job holding that up. Goes down like that and you can lock it into place right there. For full disclosure, this back rim is just as nice as the rest. No scuffs or scrapes on there. And down the rest of this side once again, cab and doors all look very good. It does come with the heated fold up till mirrors. They have blind spot monitoring, directional signals, the 360 camera. They fold in, fold out. Inside the bighorn level one package gives you the dark charcoal and black cloth interior. 40, 20, 40 split bend seating. No rips or tears on the seats. They are in excellent shape. Both of these front seats are heated.  Auto headlamps, power pedals, power windows, power locks, power mirrors. You get the cloth bolster, wood grain trim. These mirrors do power fold in. I always like showing both sides so that you know that both sides are working properly. And then you get the power blind spot mirror, which is a kind of a neat thing. You can see that outside mirror is power, which is not a big deal on the driver side, but for the passenger side to adjust that is very nice. Back seats are just as clean as the front seats. No rips or tears back here. It does have the latch child safety system for any child car seats who may have fixed glass rear window. These seats fold up. You do get a low floor back here, which is nice. If you've got muddy boots or tools, put them on there. You're not going to get your seats dirty. Or if you've got pets, put both sides down and then they won't get your seats dirty. It does come with a receiver hitch reducer. And then under here you get in-floor storage with removable bins. Back seats give you a set of factory floor mat back here. Side curtain airbags, child safety locks on the back doors and the bottoms of the doors all look really, really good on this truck. We'll hop inside and check out the miles, the radio and everything that this truck has to offer. Then we'll start it up and take a look under the hood. You can see that this one has 26,769 miles. You do get a digital speedometer. Instrument cluster is very nice and clean. Comes with the heated leather wrap steering wheel, Bluetooth and information center controls on the left, cruise controls and gear selector on the right. So it does have the push button start. And it has the 8.4 4C radio. You can see it does have the factory navigation system on it. You get AM, FM and Sirius XM radio capabilities. And you do get the heated seats, heated steering wheel buttons, as well as your surround view camera, which is working nicely. And then your backup camera. You can do a wide view of the back, a wide view of the front, a narrow view of the front. You can check out your cargo cam right there as well. Or just your backup camera. The thing I like most is the side view cameras for when you're backing up a trailer or a camper or a boat. You can change which side you're looking at, which would be ultra handy, especially if you're backing up a trailer. That's the one thing I wish my truck had is that system right there. Anyway, so that's a great system. All the cameras on here are really a nice feature. Down here are your more tactile climate volume and tune controls, heated seat buttons again, 8-speed automatic transmission, push button four-wheel drive. Down here you get two USBs, two USB C's and an Augsjack. You get your factory brake controller. This one has the alternate trailer height. So it has the rear airbag suspension so it can raise and lower the bed of the truck to level out your truck, which is a pretty neat system. And then you can program different trailers, stability control, tow haul mode, and your front and rear parking sensors. You get keyless entry with remote start. That's in really nice shape. And the passenger side, floor mat, and seat are in excellent condition as well. This one also has the speakers in the ceiling, part of the Alpine premium sound system. So that's a really nice feature as well. Assist and SOS buttons up there. And you do get the home link buttons for your garage door security systems and lighting systems. We'll start it up and take a look under the hood. Starts right up. No check engine lights or anything like that. Did want to show you the tire and loading information sticker as well as the VIN sticker. Always get asked to show these. All right, let's go check out all those lights. They are super bright. I would personally like to thank you for checking out the video today and hopefully from this HD video. You've been able to verify the quality, condition, options, and cleanliness of this truck all the way around. I think it's in great condition. Under the hood, we have the 6.4 liter V8 Hemi engine. 410 horsepower engine base. Very clean runs, very smooth. Once again, this truck has been fully safe and inspected by our service shop. As a fresh oil and filter change, all the fluids have been checked and topped off. And this truck is 100% ready to go. There is the emissions sticker. And I would highly recommend this truck from a quality and condition standpoint. I don't think you'll find a more optioned out Bighorn Level 1 package than this one or in nicer condition. And to see more pictures of this truck or one of our other 550 new and used cars, trucks, SCVs, minivans, wranglers, halftons, three-quarter tons, one-tons, you name it. We got to go to that website right there, summitauto.com. Full pictures and descriptions of every single vehicle from two locations all at summitauto.com. If you'd like to check out more HD videos, you can go to youtube.com slash summitauto. Remember to like, subscribe, and share on this video and all the videos that you see there. In fact, in a second, you'll see a link to subscribe to our YouTube channel on the upper left. A link to more Ram 25-Hour Truck videos, like this one, the upper right link to this vehicle on our website on the lower left. And a link to one of our latest YouTube videos on the lower right. Click those, check us out. And we're super excited to help you with the Sulture Clean 2019 Ram 2500 Crew Cab Short Box Bighorn Level 1 Sport Edition and Billet Silver Metal. Thanks again for checking out the video. Remember to like, subscribe, and share on the YouTube channel. I really appreciate it. Thanks again.


Hello and welcome to this session in which we would look at absorption costing and variable costing. Absorption costing and variable costing are two methods to estimate cost for product. Absorption costing is using GAP. GAP is used for external reporting purposes. Variable costing is used for internal decision making. Sometimes it's called the contribution method or the direct method. The reason we need to learn about absorption costing and variable costing is because this topic is covered in your managerial accounting cost accounting CPA exam BEC section as well as the CMA exam. So if you are a CPA candidate studying for the CPA exam, I strongly suggest you check out my website farhatlectures.com. I don't replace your CPA review course. I can be a useful addition to your CPA review course. I can add 10 to 15 points to your CPA review course by explaining the material differently. Your risk is one month of subscription. Your potential gain is passing the exam and if not for anything, take a look at my website to find out how well or not well your university is doing on the CPA exam. I do have resources to many other courses. Please connect with me on LinkedIn if you haven't done so and take a look at LinkedIn reviews. Students that use my resources to pass the CPA exam like this recording connect with me on Instagram, Facebook. I'm also on LinkedIn and Reddit. So let's go ahead and start our discussion. Absorption costing versus variable costing. Absorption costing, sometimes it's called full costing, just another term for it. Just so you know, in case your textbook is using a different method. Now, absorption costing, it absorbs all product costs. So when you are costing the product, it's going to absorb direct material, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. And hopefully you know that these are the product costs. And basically absorption costing is what you've been learning all about throughout your managerial accounting or cost accounting course, because the new method really is variable costing. So it includes all the product costs. The period costs will include variable selling and administrative, fixed selling and administrative. Now, variable costing, hopefully from the word, you would know that variable costing is considered only variable manufacturing costs in costing the product itself, in costing the product itself. And that is direct material, direct labor, so far so good, variable manufacturing overhead. This is to cost the product. Then we have period cost. Period cost, we will have variable selling and administrative and fixed selling and administrative. So the difference is, so hold on a second, what happened to this fixed manufacturing overhead? I don't see it. Well, here's what's going to happen. This fixed manufacturing overhead, that's going to be the difference between variable and absorption costing. This fixed manufacturing overhead under the variable costing, it's going to be x pence. Why? Because it's considered a period cost. And hopefully we all know that a period cost get expensed. A period cost get expensed. So what's going to happen? What's going to make the difference between absorption costing and variable costing is how we treat fixed manufacturing overhead. Let me highlight this number in yellow. So this is the number that makes the difference between the two. Okay? Fixed manufacturing overhead. Under absorption costing, this is first considered an asset. Well, let's be specific. It's inventory. Then once it's sold, it's turned into cost of goods sold. So if it's not sold, it sits in inventory as an asset. Under the variable costing, fixed manufacturing overhead is expensed immediately. So basically it turned into an expense and to a cost immediately, immediately during the period. Now, let's take a look at the income statement format because we have to clarify how the income statement format is set up for each method. The traditional format and when we say the traditional, we mean absorption costing because this is what we've been learning. We'll take sales minus cost of goods sold. We get to gross profit. Under the contribution margin, CM method under the contribution margin, we'll take revenues minus variable cost and we'll get contribution margin, not gross margin. So some of the questions on the CPA exam will deal around compute the contribution margin, compute the gross profit margin. So notice here's what I need to clarify here. When we say, when we say variable cost, we mean direct material. I mean, you use a different color because I want to grab your attention, direct material, direct labor, variable overhead and variable selling and administrative. So all of those are variable cost. Now the product cost is only material, labor and manufacturing overhead. But all of them are variable costs to come up to contribution margin. Then from the contribution margin, we will deduct fixed costs under the contribution margin format. Under the traditional format, we deduct selling and administrative and the selling and administrative could be variable, could be fixed, variable and fixed. Then we come up with operating expenses. So again, the only difference between the two method is how we treat fixed manufacturing overhead. This number here. Under variable costing, we expense it right away. Under absorption costing, we don't expense it until we sell the inventory. So it gets inventoried first. It's an inventory. It's an asset and it doesn't turn into an expense until we sell it. Now if we produce everything, if we sell everything that we produce, well, guess what? Those will equal to each other. If we sell and produce, if we produce and sell, it's going to be expensed. It's going to be expensed. Therefore, they equal to each other. So let's take a look at some numbers for this to make a little bit more sense. Let's assume we are producing 2,000 units for a particular company and we're selling, we're actually producing tablet and we are selling each tablet for $500. We have manufacturing cost of direct labor, $150 per tablet, direct material, $150, direct labor, $75, variable manufacturing overhead, $20 and fixed manufacturing overhead overall, $111,000. Now this $111,000, it's going to be divided by how many we are going to produce to find the fixed manufacturing overhead per one tablet. Okay, now we have selling an administrative cost. The variable selling an administrative cost is $62 per tablet, then we have a fixed selling an administrative cost in a total of $116,000. First, let's find the product cost. For direct material, it's going to be under absorption and it's going to be under variable. Direct labor, same thing, variable manufacturing overhead, the same thing. Now fixed manufacturing overhead, the cost is $55.50. Under variable cost, we don't account for fixed manufacturing overhead. So what happened to this very fixed manufacturing overhead? Does it evaporate? Does it go away? No, under the variable method, it's going to be the whole thing will be expense. The $111,000 will be expense. So we don't factor it into the product cost. Therefore, the total unit product cost is $300.50 for absorption and $245 for variable. Now if you want to copy these numbers down, because I'm going to be using them on the next slide. So pause and copy the numbers down. Now variable costing and absorption costing would result in different operating income when either unit produced are more than unit sold or unit produced are less. Simply put, there's a difference between what you produce and what you sold. If they're equal to each other, the numbers, the operating income will be the same. If unit produced equal unit sold. And I want you to understand this before we start to go into numbers. Unit produced equal unit sold, it means this whole thing, this $111,000 went to inventory, then went to cost. And obviously, under absorption costing, this is what I mean, under absorption costing and under variable costing, we expense it. Therefore, the $111,000 was expensed under both method because we produced and whatever we produced was sold. So whatever we included in fixed manufacturing overhead, we expensed. Whatever we produced to inventory, we expensed. And under variable costing, we expensed, we expensed we expensed both. Voila. They all be equal to each other. When unit produced is not equal to unit sold, then we'll have to, we'll have a different story. So the best way to illustrate this is to work actual example. Assume there is no beginning finished goods inventory. The number of unit produced is 2000. The number of units sold is 2000. There we go. What does that mean? It means the operating income will not differ whether you are using absorption or variable and we'll prove that. There is no ending inventory of finished goods because all units are sold and we have no beginning inventory. Operating income is the same for both method. Let me show you how it works. Sales revenue is a million because we produced 2000. We sold each unit at 500. 2000 unit times $300.50 is your cost of goods sold, your gross profit, the term that we use for absorption costing is 399 minus selling and administrative cost variable, which is 2000 unit times $62.50 minus the fixed selling and administrative total operating income is 158 and we have no inventory left inventory is zero. Let's take a look at variable costing for the same company. Sales is the same. Variable cost is we have 2000 unit times 245. The product cost minus the variable selling and administrative cost 2000 unit times $62.50. The contribution margin, the terminology we use for variable costing is 385. Notice those are different. Then we deduct fixed cost, the whole thing, the $111,000 and we deduct the fixed selling and administrative cost. Notice we have variable costs in one place and fixed costs in the other and operating income. Notice operating income is the same whether we are using both methods. The reason it's the same it's because every unit we sold, every unit we produced, which is 2000, we sold. Therefore, ending inventory obviously is zero if we sold everything. Now the best way to illustrate the concept is to work another example for different assumptions. Assume the following. There is no beginning, finished goods inventory. The company produced 2500 tablets. The company sold 2000. What does that mean? It means you have an ending inventory 500 unit. What does that mean? If I know I have more units in ending inventory, it means my absorption costing will have less expenses, less to be more specific, not expenses, less cost of goods sold because some of those units 500 they're not sold. We're not going to expense them. Under variable costing we're going to have more expenses under the period cost because we're going to expense all fixed manufacturing overhead and we're going to show this in numbers that I just told you. Hopefully you can follow this. So we have 500 in ending inventory. Therefore, we started with zero unit. We produced 2500 sold 2000. We have 500 unit remaining. Here's the unit cost 150, 75, 20. Now notice the fixed manufacturing overhead 111 divided by 2500. So what I want you to notice is our fixed manufacturing overhead per unit went down. Now it is 40, $44.40. In the prior example, it was, let me take a look. It should be here fixed manufacturing overhead. It was around $50. Let me just show you. I want you to see this. It's $55.50. So how did our fixed manufacturing overhead went down? We produced more units. So notice as you produce more unit, your fixed unit per your fixed cost per unit for manufacturing fixed manufacturing overhead goes down. Okay, kind of it looks good for the managers. Oh, great. Why? Why it goes down because what's happening is you are using the same electricity, you are using the same electricity, but producing more units. Therefore, let's look at absorption costing. We sold 2000 unit at $500, 2000 unit times 298 the number here. This is our gross profit. Our variable cost 2000 unit times $62.50 minus the fixed selling and administrative. So operating income 180 200 under variable costing 2000 unit times 500 2000 unit times 245 2000 unit times $62.50 sales minus variable cost gives us contribution margin. The language is very important here. We're going to expense all of fixed manufacturing costs, which is 111. And we're going to expense fixed selling and administrative. We're going to take contribution margin minus the fixed cost. The operating income is 158. So notice the operating income is lower. So our income is lower than absorption costing is because we expense this whole, this whole amount 111,000 variable costing that not expense the whole amount. Why? Because we still have 500 unit 500 unit and those 500 unit. Let me show you what happened really. Well, let's compute the difference between the two first. Let me show you how you can compute the difference between the two. So what is the difference? What's the difference in profit between variable costing and absorption costing absorption costing 180,200 minus 158.4 variable. So the difference is 22,200. Let me show you where that difference came from. We still have 500 units unsold and those 500 unit absorbed in them $44 and 40 cent of fixed manufacturing overhead. Therefore, if we take 500 times $44 and 40 cent and voila, 22,000, this is what explained the difference. And this is why absorption costing will have a lower cost, which is a higher profit is because 500 unit are inventory in those 500 units. What's hitting, what's hitting in them, what's absorbed in them is that $44 and 40 cent. That's kind of staying on the balance sheet, which is right here. Look, finished goods inventory, we still have 500 unit. Part of those is fixed manufacturing overhead. Okay. And this is what created the difference. And obviously the 144 and the 144,700 and 122,500, the difference is 22,200. Now let's go ahead and change the scenario again. Let's go ahead and change the scenario. Assume the following. There are 500 units in beginning inventory and beginning finished goods inventory that costs 144,700, which is where this came from. Don't be surprised it came from here. So it came from the prior year because this is what we started with. And the company produced 1,500 unit. We're starting with 500. We produced 1,500 and we sold 2,000. What happened here is this. We produced, notice what happened, we produced 1,500 sold 2,000. Hold on a second. How can you sell more than you produce? Well, the reason I sold more than I produce is because I have 500 from the prior period. That's why. But if I'm going to sell more than what I produced, you're going to see what's going to happen under variable costing. I'm going to have more profit under variable costing. I'm going to have more profit because some of the cost was expensed in the prior year for the variable costing. For the absorption costing now, all the cost that was hitting on the inventory, an inventory on the balance sheet, it's going to be released to the income statement. Let's see how it works. Let's work this example. Again, direct material, direct labor and variable cost is the same for both. Now the fixed overhead per unit is 111 times 1,500. Notice fixed overhead went up now. Overhead per unit. Fixed manufacturing overhead because we only produced 1,500 unit. So the unit cost under variable is 319, under absorption is 319, under variable 245. It's only the same thing, labor material and manufacturing overhead. Let's compute the income statement. Sales is a million. Cost of goods sold is number of units from the prior period times 28940. This is from prior period and 1,500 unit times 319 for this period. So total cost is 623200. Sales minus cost of goods sold equal to gross profit. Variable cost is 2,000 unit times 6250. Fixed selling and administrative 116. Contribute gross profit minus selling, minus fixed selling at administrative will give us 135,800. We sold everything. We have no inventory. Let's take a look at variable costing. Revenue of a million. Variable cost 2,000 times 245. 2,000 unit times 6250, which is the same as here, 125, but now it's under variable cost. Contribution margin is 385 million minus 615. Fixed cost is fixed manufacturing cost 111. Fixed selling and administrative cost 116. So notice here what's happening is fixed manufacturing cost is 111. Now we are expensing this 111, but notice what happened over all operating income. Operating income is 158. So it's 158, 158. It says more than 135,800. Why it's more? It's because from the prior year, remember the prior year for this company under variable costing, they had some inventory that was not released. That was not released to the income statement. Now it was released right here. Let me highlight to you. It was released right here. So those 500 units are released. Those 500 units had additional. They had additional fixed manufacturing overhead. And as a result, we have more expenses here. We have less expenses here now because remember we sold 2,000, but we produce only 1,500. Therefore operating income is 185, and the inventory is gone. Now the best way also to look at this is to look at the whole picture. What I mean by a whole picture? Look at the results over three years. Kind of to see the effect. So let's take a look at the results of three years. This is year one and we already did all of this. Operating income was 158. Operating income was 158. Why? Because in unit one, unit produce equal to unit sold. Therefore, absorption operating income will equal to variable operating income. Fair enough. Year two. Year two is this one right here. Remember in year two, we produced more units than we sold. If we produce more units than we sold, some of the costs for absorption costing will be hitting, will be hitting an inventory on the balance sheet. Therefore, we're going to have more operating income, 182,000, than operating income under variable costing. And remember I told you, I showed you the difference and I showed you how to compute the difference. In year three, the opposite happened. Unit produce were less than the unit sold. Therefore, absorption costing income will be less than variable costing. Absorption costing income 135,800 is less than 158. Then we zeroed out. Inventory is gone. So let's see what happened over a three-year period. The first thing I want to tell you in the long run, and not in the long run, when everything is expense, notice operating income is the same over a period of three years, 474,474,000 in total. Why? Because in the long run, you are going to expense everything. Once you sell it, therefore, everything will consolidate, will not consolidate, everything will clear. All your costs will clear into the income statement. Okay? Therefore, the two will equal to each other. Sales is obviously the same. Again, cost of goods sold will defer and selling an administrator, which they're not, you know, they're not comparable, you know, cost of goods sold versus contribution margin. Of course, they will defer because of the fixed manufacturing overhead, how we treat this. And selling an administrative cost versus fixed cost, those will defer because the way we treat fixed manufacturing overhead. But overall, over a three-year period, over a three-year period, once again, once the inventory is cleared, the two numbers are equal to each other. Overall, they are equal to each other. So this is an overview about variable costing versus absorption costing. It's very important to understand this topic, whether you're a candidate for the CPA exam or an accounting student. Now, in the next session, I will, I will work an example just to show you how this method is being, is used for what purpose. Obviously, managers use variable costing because they don't care about absorption costing because managers are concerned with what cost is going to vary with the, with their operation. They believe, they believe manufacturing overhead is irrelevant because it's a sunk cost. There's nothing that they can do about that. Therefore, they will produce using variable costing. Okay. But anyway, the best way to illustrate this concept is through an example. Once again, I'm going to invite you to visit my website for hatlectures.com.  If it works, it will be great. If not, then you would learn something. Good luck, study hard, and of course, stay safe.