The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $ 50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use Unit or Factor method in computing depletion. A. $ 5,000,000.00 B. $ 5,010,000.00 C. $ 5,025,000.00 D. $ 5,050,000.00

The correct answer is $\boxed{\$5,025,000.00}$.

The depletion charge is the amount of money that is used to recover the cost of an asset over its useful life. In this case, the asset is the oil well, and the useful life is the estimated number of barrels of oil that it will contain. The depletion charge is calculated by dividing the cost of the asset by the estimated number of barrels of oil that it will contain. In this case, the cost of the asset is $50,000,000 and the estimated number of barrels of oil that it will contain is 5,000,000. Therefore, the depletion charge is $10 per barrel.

In the year where the oil well produces half million barrels of oil, the depletion charge is $5,025,000. This is calculated by multiplying the depletion charge per barrel ($10) by