The Michigan Mining Company has acquired a coal mine for a cost of $4,500,000. No other costs are involved. The total coal expected to be extracted from the mine is 35,000 tons. During the year 2018, the total extraction of coal is 5,700 tons. There is no salvage value. Required: Using the above information compute: the depletion rate per tone of coal extracted. The depletion charge of the coal extracted during the year 2018.
The Michigan Mining Company has acquired a coal mine for a cost of $4,500,000. No other costs are involved. The total coal expected to be extracted from the mine is 35,000 tons. During the year 2018, the total extraction of coal is 5,700 tons. There is no salvage value. Required: Using the above information compute: the depletion rate per tone of coal extracted. The depletion charge of the coal extracted during the year 2018.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 2E
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The Michigan Mining Company has acquired a coal mine for a cost of $4,500,000. No other costs are involved. The total coal expected to be extracted from the mine is 35,000 tons. During the year 2018, the total extraction of coal is 5,700 tons. There is no salvage value. Required: Using the above information compute: the depletion rate per tone of coal extracted. The depletion charge of the coal extracted during the year 2018.
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