Question

A coal mine cost​ $1,009,000 and is estimated to hold​ 57,000 tons of coal. There is no residual value. During the first year of​ operations, 12,000 tons are extracted and sold. Calculate depletion per unit.​ (Round your answer to the nearest​ cent.)

Answer 1

Answer:

The answer is: The depletion is $17.70 per unit.

Explanation:

We have the depletion per unit is calculated as below:

Depletion per unit = ( Machine cost - Residual value at the end of useful life ) / Expected capacity;

So, apply in to the question we have:

Depletion per unit = ( Cost of coal machine - Residual value) / Expected tons of coal hold = ( 1,009,000 - 0) / 57,000 = 1,009,000 / 57,000 = $17.70 per unit ( round to the nearest cent).

Thus, the depletion is $17.70 per unit.