Chapter 9: Plant assets, natural resources, and intangible assets

1/ What is the depletion cost per barrel if a newly discovered oil well costs $6 million to acquire, drilling permits cost $525,000, and site preparation costs are $800,000? Assume that the well will yield 15 million barrels of oil and have no salvage value. (Round the answer to the nearest penny.)

2/Beacon Petroleum purchased an operational oil well for $8 million and expects to extract 16 million barrels over the 10 year life of the well. Beacon estimated the wells salvage value to be zero. What is the firms cost of goods sold for year 1 if it extracts 2.5 million barrels of oil and sells 2.0 million barrels of oil?

Please show your work. Thanks