Final answer:
Despite the mismatch between the question and the scenario provided, the firm's accounting profit in the scenario given is calculated by subtracting the total explicit costs from the total revenues, resulting in an accounting profit of $50,000.
Step-by-step explanation:
The student asked how much profit Argo will report for 2009 using the cost recovery method. However, the information provided relates to a different scenario involving a firm with sales revenue and certain expenses. To answer the original question, we would apply the cost recovery method, but since the provided information doesn't match the query, we will address the scenario given.
To calculate the accounting profit, we take the total revenues and subtract the explicit costs. In this case, the firm had total revenues of $1 million and incurred explicit costs for labor ($600,000), capital ($150,000), and materials ($200,000).
The formula for accounting profit is:
Accounting profit = Total revenues - Explicit costs
So, for the given scenario:
Accounting profit = $1,000,000 - ($600,000 + $150,000 + $200,000)
Accounting profit = $1,000,000 - $950,000
Accounting profit = $50,000