In computing the current period expense associated with the depletion of a natural resource, the depletion per unit is calculated by dividing the cost of the natural resource by the total estimated amount of the resource to be extracted and then multiplying by the units extracted.

Question

Quizplus · Accepted Answer

This is the correct formula for calculating depletion expense per unit. It takes into account the total cost of the resource and how much of it has been extracted, which are both important factors in determining the current period expense.

In Computing the Current Period Expense Associated with the Depletion