Final answer:
The question is about accounting in the context of a business. To find the accounting profit, deduct labor, capital, and materials costs from sales revenue. In this case, the firm's accounting profit is $50,000, obtained by subtracting the total expenses of $950,000 from the $1 million in sales revenue.
Step-by-step explanation:
The subject of the question pertains to the process of accounting for the cost of goods sold and inventory management in a business setting. Specifically, the question involves the movement of goods from assembly to finished goods inventory and the associated financial recordings.
Accounting profit is calculated by subtracting all the expenses from the sales revenue. In this example, the firm had sales revenue of $1 million last year, and the expenses were as follows: $600,000 on labor, $150,000 on capital, and $200,000 on materials. To calculate the accounting profit, we would subtract the sum of these expenses from the sales revenue:
Calculation of Accounting Profit:
- Sales revenue: $1,000,000
- Total expenses (Labor + Capital + Materials): $600,000 + $150,000 + $200,000 = $950,000
- Accounting Profit: $1,000,000 - $950,000 = $50,000
The firm's accounting profit would therefore be $50,000.