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The video tutorial explains how to break down the costs of an installation job. It emphasizes the importance of determining the actual cost of the job without markup. The presenter gives examples of various expenses involved, such as $35 for torch vacuum nitrogen, $60 for a permit, $20 for metal, and $75 for a disconnect. Additional costs mentioned include $5 for leveling dirt and various materials like copper fittings and pipe. Labor costs are estimated for two workers at $25 per hour for 12 hours. The presenter advises to account for a labor rate higher than what is actually paid, suggesting viewers consider their own pricing strategies.