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. $ 5,050,000.00
• C. $ 5,025,000.00
• D. $ 5,010,000.00

Answer: (A)