Final answer:
The firm's accounting profit would be the difference between its sales revenue and its explicit costs, which is $50,000.
Step-by-step explanation:
When a company reports the following accounts for the year ended December 31, it is typically referring to its financial statements. From the provided information, the question seems to be asking about calculating the accounting profit of a firm. To determine the firm's accounting profit, we need to subtract all the explicit costs from the sales revenue. Here is the calculation based on the given numbers:
- Sales Revenue: $1,000,000
- Labor Costs: $600,000
- Capital Costs: $150,000
- Materials Costs: $200,000
The total costs incurred are: $600,000 (Labor) + $150,000 (Capital) + $200,000 (Materials) = $950,000. Subtracting this from the sales revenue of $1,000,000:
Accounting Profit = Sales Revenue - Total Costs = $1,000,000 - $950,000 = $50,000.
Therefore, the firm's accounting profit is $50,000.