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One oil company owns three categories of wells where category (A) produces only crude oil, category (B) produces only natural gas and category (C) produces
One oil company owns three categories of wells where category (A) produces only crude oil, category (B) produces only natural gas and category (C) produces both crude oil and natural gas. If you know that: -One crude oil barrel contains 5 million BTUs -1 000 cubic feet of gas contains 1 million BTUs -The cost of producing a barrel of oil in category (A) well is 3 $. -The cost of producing 1 000 cubic feet of the gas in category (B) well is 0,50 $. -Production volume of the wells in category (C) is 2 million crude oil and 4 000 million cubic feet of gas. -Production costs in the group (C) are 2 100 000 $. -The market price of oil barrel is 1,5 $ and the market price per 1 000 feet of gas is 0.15 $. Required: Determine the cost of one thousand of cubic feet of natural gas in the wells of category (C) by using the selling price method
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