The accounting profit for the firm is calculated by subtracting its total expenses from its sales revenue, resulting in an accounting profit of $50,000 for the year.
The question asks about calculating the accounting profit for a firm based on its sales revenue and expenses. To find the accounting profit, one would subtract the total expenses from the total sales revenue. In this scenario, the firm's sales revenue was $1 million, and the firm incurred expenses of $600,000 on labor, $150,000 on capital, and $200,000 on materials.
The calculation would be as follows:
- Sales Revenue: $1,000,000
- Total Expenses: $600,000 (Labor) + $150,000 (Capital) + $200,000 (Materials) = $950,000
- Accounting Profit: $1,000,000 (Sales Revenue) - $950,000 (Total Expenses) = $50,000
Therefore, the firm's accounting profit for the year was $50,000.