The formula to calculate the Depletion Cost Per Unit (DCPU) is:
DCPU=TC−RVTU
Where:
Let's say the total cost of the resource is $1,000,000, the residual value is $100,000, and the total number of units is 500,000. Using the formula:
DCPU=1,000,000−100,000500,000
We get:
DCPU=1.80 dollars per unit
So, the depletion cost per unit is $1.80 per unit.