On 2009 January 2, York Mining Company acquired land with ore deposits at a cash cost of USD 1,800,000. Exploration and development costs amounted to USD 192,000. The residual value of the land is expected to be USD 360,000. The ore deposits contain an estimated 6 million tons. Present technology will allow the economical extraction of only 85 percent of the total deposit. Machinery, equipment, and temporary sheds were installed at a cost of USD 255,000. The assets will have no further value to the company when the ore body is exhausted; they have a physical life of 12 years. In 2007, 200,000 tons of ore were extracted. The company expects the mine to be exhausted in 10 years, with sharp variations in annual production.
a. Compute the depletion charge for 2009. Round to the nearest cent.
b. Compute the depreciation charge for 2009 under the units-of-production method.
c. If all other mining costs, except depletion, amounted to USD 1,260,000, what was the average cost per ton mined in 2009? (The depreciation calculated in b is included in the USD 1,260,000.)