A coal mine cost $1,003,000 and is estimated to hold 50,000 tons of coal.There is no residual value.During the first year of operations,6,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent. )

Question

Quizplus · Accepted Answer

Depletion per unit = (Cost - Residual value)/ Estimated total units
Depletion per unit = ($1,003,000 - 0)/ 50,000 tons = $20.06 per ton

A Coal Mine Cost $1,003,000 and Is Estimated to Hold