Aramus Company operates the Able Lease. The accounting procedure attached to the JOA allows Aramus to recoup its overhead by the use of a combined fixed rate-well basis of \($1,000\) per producing well and \($10,000\) per drilling well.

REQUIRED:

a. How much total overhead would Aramus bill the joint account if the Able Lease had four wells that produced every day the previous month?

b. What if three wells produced every day and only one produced for five days?

c. What if the only operation on the lease the previous month was the drilling of a well?

Drilling operations commenced on the first day of the month, operations were suspended for four days on the 20th, and operations commenced again on the 24th and continued through the end of the month. A month is considered to be 30 days.