Depletion Expense Calculator

Calculate Depletion Expense



Formula

The formula to calculate the Depletion Expense is:

\[ \text{DE} = \text{UC} \times \text{CPU} \]

Where:

The cost per unit (CPU) is derived by the following formula:

\[ \text{CPU} = \frac{\text{P} + \text{E} + \text{D}}{\text{UE}} \]

Where:

What is Depletion Expense?

A depletion expense is a charge applied to profits in exchange for the use of natural resources. These natural resources can be anything from gas, to oil, to minerals, and more. It represents the allocation of the cost of extracting these resources over the period they are consumed.

Example Calculation

Let's consider an example:

Using the formula to calculate the Depletion Expense:

\[ \text{DE} = 1000 \times 5 = 5000 \text{ dollars} \]

This means that the depletion expense for this scenario is $5,000.