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C is corrent.  The solutions approach is to determine the depletion cost per ton as illustrated below. The $4,000,000 estimated net cost of the mine divided by the 4,000,000 estimated removable tons results in a depletion rate of $1 per ton. Since 400,000 tons were removed, the total depletion cost would be $400,000. Note that depletion cost does not become an expense until the minerals are sold. Since 375,000 tons were sold, there would be an inventory of $25,000 at $1 per ton.


A is incorrect. The $4,000,000 estimated net cost of the mine divided by the 4,000,000 estimated removable tons results in a depletion rate of $1 per ton. Since 400,000 tons were removed, the total depletion cost would be $400,000. Note that depletion cost does not become an expense until the minerals are sold. Since 375,000 tons were sold, there would be an inventory of $25,000 at $1 per ton.


A is incorrect. The $4,000,000 estimated net cost of the mine divided by the 4,000,000 estimated removable tons results in a depletion rate of $1 per ton. Since 400,000 tons were removed, the total depletion cost would be $400,000. Note that depletion cost does not become an expense until the minerals are sold. Since 375,000 tons were sold, there would be an inventory of $25,000 at $1 per ton.


A is incorrect. The $4,000,000 estimated net cost of the mine divided by the 4,000,000 estimated removable tons results in a depletion rate of $1 per ton. Since 400,000 tons were removed, the total depletion cost would be $400,000. Note that depletion cost does not become an expense until the minerals are sold. Since 375,000 tons were sold, there would be an inventory of $25,000 at $1 per ton.