Final answer:
To calculate the firm's accounting profit, subtract the total costs from the sales revenue. The total costs include labor, capital, and materials. The firm's accounting profit is the difference between the sales revenue and the total costs.
Step-by-step explanation:
To calculate the firm's accounting profit, we need to subtract the total costs from the sales revenue. The total costs include labor, capital, and materials. The labor cost is $600,000, the capital cost is $150,000, and the material cost is $200,000. Adding these costs together, we get a total cost of $950,000. Subtracting the total cost from the sales revenue of $1 million, the firm's accounting profit is $50,000.