Final answer:
A firm's accounting profit is the difference between its sales revenue and total expenses. In the example given, the firm's accounting profit was $50,000, calculated by subtracting the sum of labor, capital, and material expenses from the $1 million sales revenue.
Step-by-step explanation:
The question doesn’t provide enough information to directly calculate the sales, variable expenses, and fixed expenses for Holiday Creations, Incorporated for the month mentioned when they sold 50,000 units. However, we can use a provided reference question to guide you on how to calculate a firm's accounting profit, which may help infer the kind of data needed to answer the original question.
To determine a firm's accounting profit, you need to subtract the total expenses from the sales revenue. For instance, in another scenario, if a firm had sales revenue of $1 million last year and spent $600,000 on labor, $150,000 on capital, and $200,000 on materials, the accounting profit would be calculated as:
Sales Revenue - Total Expenses = Accounting Profit
$1,000,000 - ($600,000 + $150,000 + $200,000) = $1,000,000 - $950,000 = $50,000
Therefore, the firm's accounting profit was $50,000.