Depletion Cost Calculator

✖Initial Cost refers to the total expenditure incurred at the outset or commencement of a project, investment, or purchase.ⓘ Initial Cost [I]			+10% -10%
✖Amount of Material Used refers to the quantity or volume of raw materials or substances consumed in the production process to create finished goods or provide services.ⓘ Amount of Material Used [U]			+10% -10%
✖Original Amount of Material Purchased refers to the initial quantity or volume of raw materials acquired by a business through the purchasing process.ⓘ Original Amount of Material Purchased [P]			+10% -10%

✖Depletion Cost is the allocated cost of the natural resource over a specific period.ⓘ Depletion Cost [D]

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Formula

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Depletion Cost

Formula

`"D" = "I"*("U"/"P")`

Example

`"50000"="100000"*("5000"/"10000")`

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Depletion Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased)
D = I*(U/P)
This formula uses 4 Variables

Variables Used

Depletion Cost - Depletion Cost is the allocated cost of the natural resource over a specific period.
Initial Cost - Initial Cost refers to the total expenditure incurred at the outset or commencement of a project, investment, or purchase.
Amount of Material Used - Amount of Material Used refers to the quantity or volume of raw materials or substances consumed in the production process to create finished goods or provide services.
Original Amount of Material Purchased - Original Amount of Material Purchased refers to the initial quantity or volume of raw materials acquired by a business through the purchasing process.

STEP 1: Convert Input(s) to Base Unit

Initial Cost: 100000 --> No Conversion Required
Amount of Material Used: 5000 --> No Conversion Required
Original Amount of Material Purchased: 10000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

D = I*(U/P) --> 100000*(5000/10000)

Evaluating ... ...

D = 50000

STEP 3: Convert Result to Output's Unit

50000 --> No Conversion Required

FINAL ANSWER

50000 <-- Depletion Cost

(Calculation completed in 00.004 seconds)

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Created by Heet

Thadomal Shahani Engineering College (Tsec), Mumbai

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Verified by Vaibhav Mishra

DJ Sanghvi College of Engineering (DJSCE), Mumbai

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< 8 Depreciation Calculators

Asset Value after 'a' Years

Go Asset Value = Original Value of Assets at Start of Service-(Original Value of Assets at Start of Service-Salvage Value of Asset at End of Service)*(((1+Annual Interest Rate)^(Number of Years in Actual Use)-1)/((1+Annual Interest Rate)^(Service Life)-1))

Replacement Value by Sinking Fund Method

Go Replacement Value = (Original Value of Assets at Start of Service-Asset Value)/((((1+Annual Interest Rate)^(Number of Years in Actual Use)-1)/((1+Annual Interest Rate)^(Service Life)-1)))

Depreciation by Sum of Year Digit Method

Go Depreciation = (2*(Service Life-Number of Years in Actual Use+1))/(Service Life*(Service Life+1))*(Original Value of Assets at Start of Service-Salvage Value of Asset at End of Service)

Fixed Percentage Factor using Matheson Formula

Go Fixed Percentage Factor = 1-(Salvage Value of Asset at End of Service/Original Value of Assets at Start of Service)^(1/Service Life)

Annual Depreciation by Straight-Line Method

Go Annual Depreciation per Year = (Original Value of Assets at Start of Service-Salvage Value of Asset at End of Service)/Service Life

Book Value of Process Equipment at any Time during Service Life

Go Asset Value = Original Value of Assets at Start of Service-Number of Years in Actual Use*Annual Depreciation per Year

Asset Value using Declining Balance Method

Go Asset Value = Original Value of Assets at Start of Service*(1-Fixed Percentage Factor)^Number of Years in Actual Use

Depletion Cost

Go Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased)

Depletion Cost Formula

Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased)
D = I*(U/P)

What is Depreciation?

Depreciation is an accounting method used to allocate the cost of a tangible asset over its estimated useful life. It reflects the gradual reduction in the value of the asset over time due to factors such as wear and tear, obsolescence, and aging. Depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash, but it is crucial for accurately reflecting the cost of using assets in a business over time.

What is Initial Cost?

The "Initial Cost" refers to the total expenses incurred at the beginning or commencement of a project, investment, or purchase. It represents the initial financial outlay required to acquire, develop, or start a particular asset, project, or undertaking. The concept of initial cost is applicable in various contexts, including business investments, capital projects, and the acquisition of assets.

How to Calculate Depletion Cost?

Depletion Cost calculator uses Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased) to calculate the Depletion Cost, Depletion Cost is an accounting method used primarily in extractive industries to allocate the cost of natural resources (such as minerals, oil, gas, timber, etc.) over the period during which the resources are extracted or consumed. Depletion Cost is denoted by D symbol.

How to calculate Depletion Cost using this online calculator? To use this online calculator for Depletion Cost, enter Initial Cost (I), Amount of Material Used (U) & Original Amount of Material Purchased (P) and hit the calculate button. Here is how the Depletion Cost calculation can be explained with given input values -> 4500 = 100000*(5000/10000).

FAQ

What is Depletion Cost?

Depletion Cost is an accounting method used primarily in extractive industries to allocate the cost of natural resources (such as minerals, oil, gas, timber, etc.) over the period during which the resources are extracted or consumed and is represented as D = I*(U/P) or Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased). Initial Cost refers to the total expenditure incurred at the outset or commencement of a project, investment, or purchase, Amount of Material Used refers to the quantity or volume of raw materials or substances consumed in the production process to create finished goods or provide services & Original Amount of Material Purchased refers to the initial quantity or volume of raw materials acquired by a business through the purchasing process.

How to calculate Depletion Cost?

Depletion Cost is an accounting method used primarily in extractive industries to allocate the cost of natural resources (such as minerals, oil, gas, timber, etc.) over the period during which the resources are extracted or consumed is calculated using Depletion Cost = Initial Cost*(Amount of Material Used/Original Amount of Material Purchased). To calculate Depletion Cost, you need Initial Cost (I), Amount of Material Used (U) & Original Amount of Material Purchased (P). With our tool, you need to enter the respective value for Initial Cost, Amount of Material Used & Original Amount of Material Purchased and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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